Which of the Following Is True of Credit Scoring

question 250

Multiple Choice

Which of the following is true of credit scoring?

• A) It audits the amount of assets the applicant has available for use in securing the credit.
• B) It specifies the terms of sale for customers who have been extended credit by a firm.
• C) It is an ongoing review of a firm's accounts receivable to determine whether customers are paying according to the stated credit terms.
• D) It applies statistically derived weights to an applicant's scores on key financial and credit characteristics.

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Definitions:

Robinson-Patman Act

A United States federal law aimed at preventing unfair competition and price discrimination among businesses.

Price Fixing

When two or more companies collude to set a product’s price.

Federal Trade Commission

A United States government agency that enforces laws related to consumer protection and competition.

Coaxial Cables

A type of electrical cable with an inner conductor surrounded by an insulating layer and an outer conductive shielding, used for transmitting data and television signals.