Final answer:
It is true that the asset base for loans usually includes accounts receivable, inventory, equipment, and real estate. Banks also consider cash reserves, loans to customers, and government bonds as part of their asset base, with government bonds being low-risk assets.
Step-by-step explanation:
Regarding the asset base for loans, it is true that typically, the asset base includes accounts receivable, inventory, equipment, and real estate. These assets are used as collateral in secured loans, giving lenders a form of security. In the event of a borrower defaulting on their loan, the lender can seize these assets to recoup some or all of the owed amount.
In addition to these tangible assets, a bank's assets also encompass other financial instruments such as cash reserves held in their vaults or at the Federal Reserve Bank, loans to customers, and bonds. Government bonds, in particular, are considered low-risk assets because they are backed by the government, which is highly likely to repay its debts, albeit typically at a lower interest rate.
If a borrower has been late on loan payments, it negatively affects the perceived risk of the loan. Therefore, it is important to assess the quality of assets and borrowers' creditworthiness when considering the asset base for loans.