A Type of Short-Term Loan Where the Borrower Sells Its

question 52

Multiple Choice

A type of short-term loan where the borrower sells its receivables to the lender up-front, but at a discount to face value, is called:

• A)a compensating balance.
• B)assigned receivables financing.
• C)a letter of credit.
• D)factored receivables financing.
• E)a bond.

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Definitions:

Festinger

A psychologist known for his theory of cognitive dissonance, which suggests that people experience psychological discomfort when holding two or more contradictory beliefs.

Cognitive Dissonance

A psychological phenomenon where an individual experiences discomfort due to holding conflicting beliefs or attitudes, leading to an alteration in one of the beliefs or attitudes to reduce the discomfort.

Reducing Techniques

Strategies or methods used to decrease anxiety, stress, or other negative emotional states.

Bem's Self-Perception Theory

A psychological theory suggesting that people often infer their own attitudes and feelings from observing their behavior and the context in which it occurs, rather than initially recognizing inner attributes as the cause.