David Wants to Open a New Gymnasium with State-Of-The-Art Equipment

question 6

Multiple Choice

David wants to open a new gymnasium with state-of-the-art equipment and qualified trainers. However, he can only afford either of the two. He decides to get the equipment first to start the gym. However, without qualified trainers to operate the equipment, David loses his customers and is forced to shut down the gym. Which of the following threats is most likely highlighted in the given scenario?

• A) High risk of failure
• B) Too little money
• C) Lack of knowledge
• D) Bigger regulatory burden

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Definitions:

Federal Funds Rate

The Federal Funds Rate is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight, set by the Federal Reserve.

Underwriting

involves the process of evaluating and assuming risk in financial transactions, notably in insurance and investments.

Insurance Company

A financial institution that provides coverage against specified risks in exchange for premiums, offering policies for health, life, property, and other forms of insurance.

Home Mortgage Loans

Loans provided by financial institutions to individuals for the purpose of purchasing residential properties, secured by the property itself.