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Why is the degree of collateral important to a lender? If the book value of the collateral is greater than or equal to the amount

Why is the degree of collateral important to a lender? If the book value of the collateral is greater than or equal to the amount of the loan, is the credit risk of a lender fully covered? If the market value of the collateral is greater than or equal to the amount of the loan, is the credit risk of a lender fully covered?

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