Which One of the Following Statements Is Correct

question 85

Multiple Choice

Which one of the following statements is correct?

• A) If the majority of a firm's new customers become repeat customers, then there is a strong argument against extending credit even if the default rate is low.
• B) A customer's past payment history reveals little information in relation to his or her future tendency to pay.
• C) A suggested policy for offering credit to new customers is to limit the amount of their initial credit purchase.
• D) The risk of issuing credit is the same for a new customer as it is for an existing customer.
• E) The recommended policy for new customers is to extend an offer of a high credit limit as an enticement to get their business.

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Definitions:

Fixated

A state in which a person becomes obsessively focused on an object or issue, potentially due to unresolved developmental conflicts.

Freud

Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Anal Stage

The second stage in Freud's psychosexual development theory, focusing on toilet training and the child's control over bowel movements, which can influence personality.

Oral

Pertaining to the mouth or spoken communication, as opposed to written.