The Three Components of Credit Policy Are

question 17

Multiple Choice

The three components of credit policy are:

• A)collection policy,credit analysis,and interest rate determination.
• B)collection policy,credit analysis,and terms of the sale.
• C)collection policy,interest rate determination,and repayment analysis.
• D)credit analysis,repayment analysis,and terms of the sale.
• E)interest rate determination,repayment analysis,and terms of sale.

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Definitions:

Investor

An individual or entity that allocates capital with the expectation of receiving financial returns.

Financial Capital

Economic resources measured in terms of money available for investing or spending in the creation and expansion of a business.

Financial Intermediary

An institution that acts as a middleman between savers and borrowers, facilitating the flow of funds in the economy.

Households

Units of individuals living together, making joint decisions on consumption, savings, and investments, fundamental to economic analysis.