Describe the trade-offs of extending credit.

Q: uss the factors which l

A: A credit crunch, also known as a credit squeeze, credit tightening, or credit crisis, is an economic…

Q: How an Ijarah contract is different from an installment-based credit sale?

A: Ijarah denotes a contract where one party transfers the right to use an item he owns to another…

Q: Why is it important to set a credit limit?

A: Solution:- Given, Credit Limit :- The term credit limit refers to the maximum amount of credit a…

Q: What is the difference between a credit sale (with a higher price as compared to the cash sale) and…

A: The amount of Sales made in credit has to be collected after certain period of time. In case of cash…

Q: Which of the following is NOT commonly regarded as being a credit policy variable? * Collection…

A: “Since you have asked multiple question, we will solve one question for you. If you want any…

Q: Describe some ways to manage credit risk at a nonfinancialcompany

A: Evaluation of the customer prior to granting credit. Nonfinancial Company does self-evaluation or…

Q: why a organisation should consider hedging net payables or net receivables with currency options…

A: Answer: Hedging is nothing but an investment risk management strategy that reduces or controls the…

Q: how  various  forms  of  abritrage  can  remove  any  discrepancies  in  pricing  currencies

A: The term arbitrage is defined as the purchase & sale of commodities or any instruments at the…

Q: Define Trade discounts.

A: Business:   It refers to a commercial activity involving buying and selling of a product or a…

Q: Discuss the factors which led to the Credit Crunch.

A: A credit crunch refers to a decline in lending activity by financial institutions due to shortage of…

Q: Essay about the importance of credit to country

A: Credit- Credit means loans. Credit plays a vital role in the economic development of any country.…

Q: main theories for internatonal banking explain.

A: International banking include cross-border banking services as well as bank foreign direct…

Q: What is a Letter of Credit? Please discuss how a Letter of Credit work. Why is Letter of Credit…

A: What is a Letter of Credit A letter of credit, sometimes known as a "credit letter," is a guarantee…

Q: Why might the market value of a loan differ from its outstanding balance?

A: Loan outstanding balance: The outstanding balance or loan balance is the remaining amount that is…

Q: How is the Equivalence Calculations made with Effective Interest Rates?

A: The formula for Effective annual rate is  Where, r - rate of return n - number of compounding.…

Q: Explain mezzanine loan?

A: Mezzanine financing is a blend of both debt and equity financing. It is a way for firms to raise…

Q: Are credit rating agencies reliable?

A: Credit rating Agencies rates the banks as per its past borrowing performance. These agencies measure…

Q: Discuss creditworthiness and its relation to the 5 C's of credit.

A: Creditworthiness is the evaluation of one company by another company to determine whether the…

Q: Trade and other payables includes what?

A: The balance sheet is the financial statements of the business that show the assets and liabilities…

Q: What is trade credit?

A: Trade credits are advantageous for buyers because they get sufficient time for making their…

Q: What are the four elements of a firm’s credit policy? To what extent canfirms set their own credit…

A: An organization generates its revenue from sales. Sales may be cash sales or on credit. When the…

Q: What is noncommited and committed line of credit?

A:

Q: What are the four key factors in a firm's credit policy? How would an easy policy differ from a…

A: Credit Policy of the firm is the Policy firm follows in extending credit to its customers. To…

Q: Why is granting credit riskier in an international context?

A: The term credit refers to selling goods on credit by the business top its customers i.e. instead of…

Q: What is the significance of credit/debt ratings

A: Credit Ratings: Credit Rating is an estimate of the borrower (be it a person, organization, or…

Q: what is the difference between co-pay and coinsurance

A: Coinsurance and copays are different variants of cost sharing arrangement between health insurance…

Q: What are the four key factors in a firm's credit policy? how would a relaxed policy differ from a…

A: Credit Policy relates to guidelines and terms of entity to facilitate credit sales that includes…

Q: Explain ARM and Floating Rate Loans?

A: Adjustable-rate mortgage (ARM): It could be a kind of contract or mortgage where the coupon rate…

Q: Define trade credit

A: Trade refers to the buying and selling of the goods and services. Trade can be between business to…

Q: Which one of the following is a spontaneous source of financing? Select the correct response:…

A: Spontaneous source of financing is the short term financing needed for business transactions which…

Q: The goal of credit policy

A: The credit policy of a firm refers to the principles laid down by the firm regarding lending. The…

Q: Explain ARMs and Floating Rate Loans?

A: Loan is referred as the amount which is borrowed from the financial institutions or individual at…

Q: What’s the difference between free trade credit and costly tradecredit?

A: Trade Credit is a kind of credit financing extended by the trader or supplier of goods and services…

Q: What is trade-off credit and collection policies and its compositions?

A: A external financing is an agreement agreement understanding between partners that facilitates the…

Q: How does the cost of costly trade credit generally compare with the cost of shorttermbank loans?

A: Trade credit is that the quantity businesses owe to their suppliers on inventory, products, and…

Q: Briefly describe the concepts of; Letter of credit, trade deficit, negotiable instrument and credit.

A: Letter of credit is a financial instrument that is used as a mode of payment specifically for…

Q: Explain what it means for a forward currency to sell at a discount and at a premium.

A: Forward is a type of derivative contract which derives its value from the underlying asset. The…

Q: Describe the Equivalence Calculations with Effective Interest Rates?

A: The effective interest rate is the real interest rate that is charged on the loan amount when the…

Q: Briefly discuss the following: 1. When does commercial credit occurs? 2. What attributes does…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: What is free trade credit?

A: Trade Credit is a type of credit financing extended by the trader or supplier of goods and services…