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Question
ASSERTION: Loans are generally secured by assets or guarantees. The borrower may be asked to repay in lump sum or in instalment.
REASONING: Bold investors do not like preference shares.
Options
A is true, and R is the correct explanation for A.
A is true, and R is not the correct explanation for A.
A is true, but R is false.
A is false, but R is true.
MCQ
Assertion and Reasoning
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Solution
A is true, but R is false.
Explanation:
The Assertion is true because loans are generally secured by assets or guarantees, and borrowers may repay them either in a lump sum or through instalments. The Reason is false because bold investors usually prefer equity shares, not preference shares, as they offer higher return potential despite greater risk.
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