Asset-Based Lenders Avoid Inventory-Only Deals;they Prefer to Make Loans Backed

question 81

Multiple Choice

Asset-based lenders avoid inventory-only deals;they prefer to make loans backed by inventory and:

• A)experienced management.
• B)good market reputation.
• C)more secure accounts receivable.
• D)All of the above

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Definitions:

Constant Growth

Constant growth refers to a situation where a quantity or system experiences growth at a steady and unvarying rate over a period of time, often used in dividend growth models.

Required Rate of Return

The required rate of return is the minimum expected return an investor demands for holding a risky investment, compensating for the risk taken.

Beta

A measure of a stock's volatility in relation to the overall market, used in the capital asset pricing model to determine expected returns.

Market Risk Premium

The extra earnings an investor foresees from holding a risky market portfolio in comparison to risk-free assets.