A Relaxation of Credit Standards Is Expected to Affect Profits

question 127

True/False

A relaxation of credit standards is expected to affect profits positively due to lower carrying costs, whereas tightening credit standards would affect profits negatively as a result of higher carrying costs.

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Definitions:

Rate

The specified frequency at which an event occurs or a quantity changes over time or per unit.

Decimal Places

The number of digits to the right of the decimal point in a number, indicating its precision.

Percents

A mathematical expression, indicating a part of a whole as so many hundredths.

Decimals

Numerical digits that represent fractions of ten, used to express numbers less than one or to provide precision in numerical representations.