Which of the following statements is false?

1) A public warehouse is a business that exists for the sole purpose of storing and tracking the inflow and outflow of the inventory.

2) A warehouse arrangement is the riskiest collateral arrangement from the standpoint of the lender.

3) Because the warehouser is a professional at inventory control, there is likely to be little loss due to damaged goods or theft, which in turn lowers insurance costs.

4) A field warehouse is operated by a third party, but is set up on the borrower's premises in a separate area so that the inventory collateralizing the loan is kept apart from the borrower's main plant.