Investors often pay professional analysts to gather and monitor information on the creditworthiness of borrowers because A. most investors are risk neutral. B. the cost of acquiring information about a borrower's creditworthiness can be high. C. doing so increases the net minus of minus tax yield on most investments. D. federal law requires it.

Question

Computers & Technology

Maverick Luna

5 November, 06:09

Investors often pay professional analysts to gather and monitor information on the creditworthiness of borrowers because A. most investors are risk neutral. B. the cost of acquiring information about a borrower's creditworthiness can be high. C. doing so increases the net minus of minus tax yield on most investments. D. federal law requires it.

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Answers (1)

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Ralph Mccann · Answer 1

B. The cost of acquiring information about a borrower's creditworthiness can be high.

Explanation:

Creditworthiness involves a detailed investigation to determine if a borrower is eligible to pay the debt if collected. The debtor could be a person, an organization or a business. This is achieved by assessing the credit score and repayment history.

The process of monitoring the creditworthiness of borrowers can be cumbersome and expensive, hence the need for a professional analyst to carry out the monitoring and evaluation of the borrower to discover his creditworthiness.