A Firm Has Borrowed $1 Million and Assigned Its Receivables

question 29

Multiple Choice

A firm has borrowed $1 million and assigned its receivables to the lender. Because of defaults, the receivables prove insufficient to cover the debt. In this case, the:

• A) lender bears the risk of default.
• B) firm bears the risk of default.
• C) default risk is shared between lender and firm.
• D)insurance carrier will bear the risk.

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Definitions:

Punitive Damages

are awarded in legal cases to punish the defendant for egregious behavior and to deter similar actions in the future.

Survival Statutes

Laws that allow certain legal rights or actions to continue to exist even after the death of an individual involved.

Personal Injuries

Refers to physical or emotional harm suffered by an individual due to another's negligence or intentional actions.

Libel

A false published statement that damages a person's reputation, categorized as written defamation.