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:

Dietary Supplements

Products containing nutrients or other ingredients intended to supplement the diet, such as vitamins, minerals, herbs, or amino acids.

Warning

A statement or event that alerts individuals about a potential danger, error, or problem.

Kosher Meals

Food prepared according to Jewish dietary laws, including the avoidance of certain ingredients and the separation of meat and dairy products.

Jewish

Pertaining to the religious, cultural, or ethnic group traditionally linked to the Hebrews or Israelites and their descendants.