Asked by Abobakr Kamal on Jun 24, 2024
Verified
Which of the following is the best definition of a credit period.
A) The process of quantifying the probability of default when granting consumer credit.
B) The length of time that credit is granted.
C) The evidence of indebtedness.
D) Graphical representation of the sum of the carrying costs and the opportunity costs of a credit policy.
E) The process of determining the probability that customers will or will not pay.
Credit Period
The duration of time allowed by a seller to the buyer to pay for the goods or services received, without incurring any additional costs.
Probability of Default
The likelihood that a borrower will fail to meet their debt obligations.
Consumer Credit
A type of personal loan that allows individuals to purchase goods or services with the promise to pay for them later.
- Understand the basic definitions and concepts related to credit management, including credit periods and credit scoring.
Verified Answer
JR
Joshua RodriguezJun 30, 2024
Final Answer :
B
Explanation :
The credit period refers to the length of time that credit is granted to a borrower by a lender, during which the borrower can purchase goods or services on account without immediate payment.
Learning Objectives
- Understand the basic definitions and concepts related to credit management, including credit periods and credit scoring.