The Statement Concerning the Average Settlement Period for Creditors That

question 41

Multiple Choice

The statement concerning the average settlement period for creditors that is correct is:

• A) A change in the creditors turnover period of 56 days to 65 days means that creditors are being paid faster.
• B) It is always best for the business to make creditors wait for their money for as long as possible.
• C) Creditors provide a free source of finance for a business.
• D) It is best to pay creditors as quickly as possible.

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Definitions:

Betas

A metric that assesses the systematic risk or volatility faced by a security or portfolio in contrast to the entire market.

Sharpe Measure

A ratio used to evaluate the risk-adjusted performance of an investment, considering both the return and the volatility of the investment.

Risk-Free Return

The theoretical return on investment with no risk of financial loss, typically associated with government bonds.

Standard Deviations

A statistical measure that quantifies the dispersion or spread of a set of data points relative to its mean, often used in the context of investment returns to measure volatility.