A Risk-Averse Person

question 130

Multiple Choice

A risk-averse person

• A)would necessarily not play a game where she had a 50 percent chance of winning $1 and a 50 percent chance of losing $1.
• B)would necessarily not play a game where she had a 75 percent chance of winning $1 and a 25 percent chance of losing $1.
• C)Both A and B.
• D)Neither A nor B.

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Definitions:

Warehouse Financing

A form of financing used by banks and other institutions to loan money to companies using inventory as collateral.

Trust Receipt

A trust receipt is a financial document issued by a bank to a buyer who has obtained a loan to purchase goods, where the buyer agrees to hold the goods in trust for the bank until the loan is repaid.

Inventory Loans

Short-term loans or lines of credit secured by a company’s inventory, used to purchase products for sale.

Factoring Accounts Receivable

A financial transaction where a business sells its accounts receivable to a third party at a discount to immediately raise cash.