There Is a Saying in Banking That When a Business

question 367

Multiple Choice

There is a saying in banking that when a business is experiencing financial problems, trade creditors are the first to know. Why would this be true?

• A) Trade creditors perform credit checks less often than do banks.
• B) Trade creditors get all of their information about credit risks from banks.
• C) Trade creditors can easily repossess the merchandise sold if the borrower refuses to pay.
• D) Trade credit is usually extended only to the most creditworthy of businesses, while banks will make short-term loans to almost any business.
• E) Trade credit is typically of shorter maturity, and offered more frequently, than other types of credit such as bank loans.

---

Definitions:

Public Availability

The extent to which information, resources, or services are accessible to the general public without restrictions.

Cro-Magnon

An early modern human of the Upper Paleolithic period in Europe, known for their robust physical appearance and for creating significant advancements in tools and art.

Neanderthals

An extinct species or subspecies of archaic humans who lived in Eurasia until about 40,000 years ago.

Social Network Users

Individuals who engage with social media platforms to connect, share, and communicate with others.