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Indicate which asset exhibits the greatest credit risk

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In each pair below, indicate which asset exhibits the greatest credit risk. Describe why.

a. Commercial loan to a Fortune 500 company or a loan to a corner grocery store

b. Commercial loans to two businesses in the same industry; one is collateralized by accounts receivable from sales, while the other is collateralized by inventory as work- in- process

c. Five- year Baa- rated municipal bond or a five year agency bond from the Federal Home Loan Bank system

d. One- year student loan (college) or a one year car loan

Reference no: EM13887238

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