Why are secured loans an important method of lending for financial institutions?

Why are secured loans an important method of lending for financial institutions?

1. Why are secured loans an important method of  lending for financial institutions?

2. If more customers want to borrow funds at the prevailing  interest rate, a financial institution can  increase its profits by raising interest rates on its loans. Is this statement true, false, or uncertain? Explain your answer.

3. Why is being nosy a desirable trait for a banker?

4. A bank almost always insists that the firms it lends to keep compensating balances at the bank. Why?

5. Because diversification is a desirable strategy for avoiding risk, it never makes sense for a financial institution to specialize in making specific types of  loans. Is this statement true, false, or uncertain? Explain your answer