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Chapter 17: Q 11. (page 426)

Why are banks more willing to lend to well-

established firms?

Short Answer

Expert verified

Banks are more willing to lend to well-

established firms because of their past records.

Step by step solution

01

Step 1. Definition

A bank is a financial institution that receives deposits and gives credit or loans.

02

Step 2. Explanation

Bank generally gives loans to well-established institutions because of their background as the record of these companies is good in earning profits with consistency and the capability of earning in future also. Because of their capacity to pay the interest and borrowings the bank gives them loans on their promise.

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