Which of the Following Changes to the Terms of Credit

question 35

Multiple Choice

Which of the following changes to the terms of credit would make the effective annual rate increase?

• A)Increase the cash discount percentage
• B)Extend the discount period
• C)Extend the payment period
• D)All of these changes will increase the effective rate

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Definitions:

Correlation Coefficients

A measure that determines the degree to which two variables' movements are associated.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables on a scatterplot.

Expected Return

The probable return on an investment, considering all possible outcomes and their probabilities, representing the average of all possible returns.

Beta

A measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole.