Which of the Following Is NOT a Difference Between Factoring

question 9

Multiple Choice

Which of the following is NOT a difference between factoring and securitization of receivables?

• A) In securitization, many investors are involved, whereas factoring usually involves only one company.
• B) Receivables are derecognized when securitized, but not when factored.
• C) The quality of receivables factored tends to be lower than those securitized.
• D) The seller retains responsibility to collect amounts due when securitized, but not when factored.

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Definitions:

Distributive Bargaining

A negotiation strategy where one party's gain is the other party's loss, often focused on dividing a fixed resource or amount.

Negative Settlement Range

A situation in negotiations where the minimum offer of the seller is higher than the maximum offer of the buyer, leading to no agreement zone.

Counter Offer

A reply to an original offer in negotiations, where the responding party makes a new proposal that typically alters terms or conditions of the initial offer.

Mixed Motive

Situations or decisions that involve conflicting interests or incentives, often requiring a balance between cooperating and competing actions.