[lindjlny]

In a Becker simulation for bed it states that a short-term loan is more liquid than a long-term loan. Can someone please explain this to me?

[nolifecpa]

my guess is the longer it takes to pay back a loan, the more likely the loan will NOT be paid back…making it less liquid

REG-65,71,74,73,70,74,79
BEC-60's,60's,69,71,76*,78
FAR-67,66,65,79
AUD-54,60's,65,83*,69,80
*expired

DONE

[sbruce810]

A short term loan is more liquid than a long term loan due to the amount of time the funds are unavailable to be used. In the case of the short term loan the funds will be paid back in a shorter period of time making the loan more liquid. The risk of default is linked to the interest rate attached to the loan and isn't directly correlated to the liquidity of the investment.

AUD - Passed
BEC - Passed
FAR - Passed
REG - Passed

Done

[lindjlny]

Thank you very much

[Author]

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