In Discounting Notes Receivable, a Financial Institution Generally Discounts at a Higher

question 5

Multiple Choice

In discounting notes receivable, a financial institution generally discounts at a higher interest rate than stated in the note as it assumes _____ risk of maker's possible default.

• A) increased
• B) decreased
• C) equal
• D) no

---

Definitions:

General Adaptation Syndrome

A model describing the body's short-term and long-term reactions to stress, consisting of three stages: alarm, resistance, and exhaustion.

Hardy Personality

Describes individuals who exhibit resilience and a stronger ability to cope with stress.

Catastrophizing

An irrational thought process where an individual believes something is far worse than it actually is, often leading to increased anxiety and stress.

Conformity

Behaving in a way that meets a specified standard, in coordination with a group.