Comments on: Which of the assets are most likely to be good collateral? Which are likely to be bad collateral? http://www.winesfromoc.com/which-of-the-assets-are-most-likely-to-be-good-collateral-which-are-likely-to-be-bad-collateral.html Mon, 13 Feb 2012 08:19:30 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: Daniel T http://www.winesfromoc.com/which-of-the-assets-are-most-likely-to-be-good-collateral-which-are-likely-to-be-bad-collateral.html/comment-page-1#comment-4831 Daniel T Sat, 28 Nov 2009 00:04:59 +0000 http://www.winesfromoc.com/which-of-the-assets-are-most-likely-to-be-good-collateral-which-are-likely-to-be-bad-collateral.html#comment-4831 H, the government bonds are the safest and most easily converted security. Nearly all of the others are likely to have problems as collateral as the resale value may vary or the item may spoil or be depleted. Even the gold will fluctuate in price and be used as part of the jewelers manufacturing process. H, the government bonds are the safest and most easily converted security.

Nearly all of the others are likely to have problems as collateral as the resale value may vary or the item may spoil or be depleted. Even the gold will fluctuate in price and be used as part of the jewelers manufacturing process.

]]> By: Muga Wa Kabbz http://www.winesfromoc.com/which-of-the-assets-are-most-likely-to-be-good-collateral-which-are-likely-to-be-bad-collateral.html/comment-page-1#comment-4832 Muga Wa Kabbz Sat, 28 Nov 2009 00:04:59 +0000 http://www.winesfromoc.com/which-of-the-assets-are-most-likely-to-be-good-collateral-which-are-likely-to-be-bad-collateral.html#comment-4832 1) Good collateral would be 100 ounces of gold. Gold is over 730 US dollars an ounce, so it's a good hedge and it has a ready market. b) FRench government bonds may not be as reliable as US government bonds, so although it sounds good, I would not consider it because it is backed by a government, which is foreign to me. 2) Bad collateral would be 20,000 kilos of bananas because it is a perishable item. If you took it as collateral it would rot before you even knew that you needed it to hedge a defaulted loan. 3) Half completed luxury yacht is also bad collateral because it is unfinished. If you had to use it to hedge a loan default you would have to spend more money and time to complete it, not to mention the tiny market of a limited number of buyers who would be interested in buying it. You would actually go at a loss if you used this one as a hedge against a defaulted loan. 1) Good collateral would be 100 ounces of gold. Gold is over 730 US dollars an ounce, so it’s a good hedge and it has a ready market.

b) FRench government bonds may not be as reliable as US government bonds, so although it sounds good, I would not consider it because it is backed by a government, which is foreign to me.

2) Bad collateral would be 20,000 kilos of bananas because it is a perishable item. If you took it as collateral it would rot before you even knew that you needed it to hedge a defaulted loan.

3) Half completed luxury yacht is also bad collateral because it is unfinished. If you had to use it to hedge a loan default you would have to spend more money and time to complete it, not to mention the tiny market of a limited number of buyers who would be interested in buying it. You would actually go at a loss if you used this one as a hedge against a defaulted loan.

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