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What are two main differences between an accommodation bondsman and other bondsmen?

User Aceminer
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Final answer:

The information provided discusses the similarities and differences between a bond and a bank loan from a firm's perspective. Both are methods to borrow money requiring interest payments, with the main difference being the lender type that needs convincing. Bank loans are usually preferred in situations with imperfect information due to a bank's more detailed knowledge of the firm.

Step-by-step explanation:

The question concerns the differences between an accommodation bondsman and other types of bondsmen. In the context of financial securities, a bondsman typically deals with the issuance and handling of bail bonds. However, the provided information talks about the similarities and differences between a bond, as a financial instrument similar to a bank loan, and bank loans themselves. Here, the commonality is that both bonds and bank loans are methods of borrowing money that require the payment of interest. The primary difference lies in the entities that a firm must persuade to acquire the funds. In the case of a bank loan, the firm must persuade a single entity, the bank. On the other hand, issuing bonds involves persuading a multitude of separate bondholders. Since banks may have more comprehensive information about a firm based on existing banking relationships, bank loans are more prevalent in situations where there is imperfect information that could affect the lending decision.

User BJack
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