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One of the tools that is used to evaluate a potential borrower is collateral. What is collateral? Why can some assets not function as collateral?

  1. One of the tools that is used to evaluate a potential borrower is collateral. What is collateral? Why can some assets not function as collateral?
  2. One piece of evidence of how well a bank is managing its risks is the banks performance. What are two ways that a bank examiner can look to see how a bank is performing?

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