Question

Which one of the following 5 Cs of credit is NOT correctly defined?
A. Capacity - Whether the borrower has enough other credit available to pay off the loan in the event of cash flow problems.
B. Capital - The borrower's equity.
C. Character - A measure of the borrower's intention/willingness to repay the loan.
D. Conditions - Assessing how economic conditions could affect the borrower's ability to repay the loan.
E. Collateral - An asset of the borrower that the lender may seize in the event of default on the loan.

Answer

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