Performing Due Diligence May Include ________

question 32

Multiple Choice

Performing due diligence may include ________.

• A) Fully understanding the FDD of the franchise company
• B) Calling on existing franchisees
• C) Visiting the franchise headquarters
• D) Doing Internet research
• E) All of the above

---

Definitions:

Moral Hazard

A situation in which one party engages in risky behavior or lacks incentive to guard against risk because another party bears the consequences.

Moral Hazard

The situation in which one party can take risks because they know that they will not have to bear the full consequences of their actions.

Life Insurance

A contract between an insurer and a policyholder, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person.

Auto Insurance

A policy purchased by vehicle owners to mitigate costs associated with getting into an auto accident.