Question

• The factor assumes credit risks associated with the________ A. Collection of accounts B. collection of securities C. Collect the fund D. collect the goods​

Answer 1

Answer:

B) Collection of securities

Interest payments from the borrower or issuer of a debt obligation are a lender's or investor's reward for assuming credit risk

Answer 2

The factor assumes credit risks associated with the collection of accounts. (Option A)

• Credit risk is the chance of a loss due to a borrower's failure to pay off a mortgage or meet contractual obligations.
• It typically refers back to the danger that a lender will now no longer be capable of accumulate the owed fundamental and interest, inflicting a disruption in coins float and multiplied series costs.
• Excess coins flows may be written to shield towards credit score danger.
• When a lender is confronted with multiplied credit score danger, it could reply through issuing a better coupon rate, ensuing in better coins flows.
• Although it's far hard to foresee who will fail to fulfill their obligations, well comparing and dealing with credit score danger can help to lessen the severity of a loss.