Which of the Following Is Least Likely to Be Correct

question 18

Multiple Choice

Which of the following is least likely to be correct about the factoring of receivables?

• A)the selling firm bears the risk of default
• B)the higher the perceived quality of the receivables, the lower the discount rate
• C)the discount is paid by the selling firm in the form of reduced sales price
• D)factoring may be the cheapest method of avoiding a cash flow problem

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Definitions:

Right of Survivorship

A legal principle in joint property ownership where, upon death, the deceased's share automatically transfers to the surviving owners.

Preliminary Order

An initial court order that sets conditions or arrangements in legal matters, often before a final decision is made.

Judicial Sale

A sale conducted under the supervision of a court, where the property is sold to satisfy a judgment.

Mortgagee

The lender or financial institution in a mortgage agreement, to whom the property is technically titled until the mortgage is fully paid off by the borrower.