Which of the Following Reasons for Considering Long-Term Loans Inherently

Multiple Choice

Which of the following reasons for considering long-term loans inherently more risky than short-term loans is most accurate?

A) There is a greater chance that a borrower will default in a longer time-frame.
B) The penalties for closing out a long-term loan early make them unattractive to many investors.
C) Long-term loans typically have ongoing costs that accumulate over the life of the loan.
D) The loan values are very sensitive to changes in market interest rates.
E) There is a greater chance that an investor will need cash before the loan term is complete.