Asked by

Georgia Ulassin
on Nov 07, 2024

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Which one of the following statements is correct?

A) If the majority of your new customers become repeat customers then there is a strong argument against extending credit even if the default rate is low.
B) A customer's past payment history is not indicative of their future payment history.
C) A suggested policy for offering credit to new customers is to limit the amount of their initial credit purchase.
D) The risk of issuing credit is the same for a new customer as it is for an existing customer.
E) The recommended credit policy for new customers is to extend the maximum amount you are willing to ever extend to that customer as their initial credit limit.

Default Rate

The percentage of borrowers failing to make payments on their loans within a specific period.

Credit Policy

A set of guidelines that a company follows to determine the credit terms and limits for customers, impacting how credit is extended and collected.

Past Payment History

The record of an individual's or entity's past payments on all debts, used by lenders to gauge creditworthiness.

  • Understand the financial and functional aspects of providing credit to clients.
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RM
raghuvanshi MayuriNov 08, 2024
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