Peter Has Applied for a Loan to Purchase a Franchise

question 94

Multiple Choice

Peter has applied for a loan to purchase a franchise of a popular convenience store in an area that is experiencing rapid population growth.If the loan is approved,it will MOST likely be because ________.

• A) there is less risk associated with a franchise than with an independent business start-up
• B) the franchise company will provide the financing
• C) the population growth justifies the market need for the store
• D) the franchise company will prevent other franchisees from operating in the same area
• E) the franchise company has influence over the bank's loan decisions

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Definitions:

Nativist

A theory or perspective that emphasizes the role of innate factors over experience or learning in the acquisition of abilities and characteristics.

Social Communication

The exchange of information and expression of thoughts, feelings, and ideas through verbal and non-verbal means within a social context.

Loss Aversion

A principle in behavioral economics suggesting that individuals are more sensitive to losses than to equivalent gains, leading to risk-averse decision-making.

Schemas

Mental structures that organize our knowledge and assumptions about something and are used for interpreting and processing information.