An unsecured credit transaction involves the lowest risk to the creditor.

Unsecured Credit

A type of loan or credit that is not backed by collateral, meaning the lender relies on the borrower's creditworthiness and promise to repay.

Lowest Risk

Involves choosing an option that minimizes potential hazards or losses.

Identify the differences between secured and unsecured credit agreements.
Recognize the risks associated with different types of credit transactions from the perspective of creditors.

Verified Answer

Final Answer :

False

Explanation :

The unsecured credit transaction involves a maximum of risk to the creditor - the person who extends the credit.

Learning Objectives

Identify the differences between secured and unsecured credit agreements.
Recognize the risks associated with different types of credit transactions from the perspective of creditors.