Which of the Following Statements Is NOT True of Consumer

question 86

Multiple Choice

Which of the following statements is NOT true of consumer finance companies?

• A)Their borrowers have higher default risk than bank customers.
• B)They charge higher interest rates than banks do on similar loans.
• C)They lend primarily to consumers.
• D)They are strictly regulated by state governments.

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Definitions:

Drive-Reduction Theory

A theory in psychology that explains motivation as being rooted in the desire to reduce internal tensions caused by unmet biological needs.

Internal Tension

Psychological stress or discomfort that arises from conflicting beliefs, thoughts, or feelings within oneself.

Unmet Biological Needs

Basic physiological requirements including food, water, shelter, and warmth that are not adequately satisfied, impacting overall health and well-being.

Incentive

Something that motivates or encourages an individual to do something or to achieve a goal.