The more lenient the terms of credit, the riskier is the firm's credit policy.

Name: The more lenient the terms of credit, the riskier is the firm's credit policy.
Brand: Quizplus
Rating: 4.9 (39 reviews)

Question

The more lenient the terms of credit, the riskier is the firm's credit policy.​

Quizplus · Accepted Answer

When a firm offers lenient credit terms, it means that it is allowing customers more time to pay or accepting customers with weaker credit history, which increases the risk of customers defaulting on their payments. Therefore, a more lenient credit policy is considered riskier for the firm.

The More Lenient the Terms of Credit, the Riskier Is