Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 1 of 15
There is a saying in banking: when a business is experiencing financial problems, trade creditors are the first to know. Why would this be true?
B. Trade creditors perform credit checks less often than banks do.
C. Trade creditors get all of their information about credit risks from banks.
D. Trade creditors can always take back the merchandise they sold the borrower if they don't get paid.
E. Trade creditors extend credit only to the most creditworthy businesses while banks extend short-term loans to almost any borrower.
A. Trade creditors typically extend businesses credit more often and for a shorter maturity than do other creditors (such as banks).
B. Trade creditors perform credit checks less often than banks do.
C. Trade creditors get all of their information about credit risks from banks.
D. Trade creditors can always take back the merchandise they sold the borrower if they don't get paid.
E. Trade creditors extend credit only to the most creditworthy businesses while banks extend short-term loans to almost any borrower.
User Contributed Comments 0
You need to log in first to add your comment.
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe issuers' objectives and compare methods for managing working capital and liquidity
CFA® 2025 Level I Curriculum, Volume 2, Module 4.