The Risk That a Party Will Not Pay While the Counterparty

question 46

Multiple Choice

The risk that a party will not pay while the counterparty is sending payment is called

• A)wire transfer risk
• B)payment risk
• C)settlement risk
• D)cross-border risk
• E)none of the above

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Definitions:

Business Operations

The activities that businesses engage in on a day-to-day basis to increase the value of the enterprise and earn a profit.

EOQ

Economic Order Quantity, a formula used to determine the optimal quantity of inventory to order that minimizes total inventory costs.

Fixed Ordering Costs

Fixed ordering costs are consistent expenses incurred in the process of ordering inventory or supplies, regardless of the order size.

Material Cost

The expense incurred to purchase or produce the raw materials used in manufacturing a product.