Question 25 2 points Save Anthony Njoroge wants to get a lower interest rate on

Question

Question 25 2 points Save Anthony Njoroge wants to get a lower interest rate on his loan to purchase a new Volkswagen convertible bug. He knows he can get a car loan for up to 6 years but decides that he can easily repay the loan in 4 years and therefore gets a 4 year loan. In which way is Anthony reducing his lender's risk? O a. He is sharing the interest rate risk with his lender O b. He is pledging valuable assets that can be seized if the loan is not repaid Oc. He is taking a larger stake in the asset he is purchasing , d. He is repaying the loan over a faster period of time e.None of the choices

Explanation / Answer

Ans. is d He is repaying the loan over a faster period of time.

Explanation: Since he is eligible for 6 year car loan but willing to repay the loan over 4 years so he is paying his loan earlier by 2 years. i.e. faster recovery of loan for banks point of view.

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