[amp_mcq option1=”Securitization” option2=”Factoring” option3=”Pledging” option4=”None of the above” correct=”option2″]<\/p>\n
The correct answer is B. Factoring.<\/p>\n
Factoring is a financial transaction in which a company sells its accounts receivable to a third party, known as a factor, at a discount. The factor then collects the receivables from the customers and pays the company the net amount, less the discount and any fees.<\/p>\n
Factoring can be a useful source of short-term financing for companies that have a lot of accounts receivable. It can also help companies improve their cash flow and reduce their risk of non-payment.<\/p>\n
Securitization is the process of converting illiquid assets into liquid securities. This is done by bundling the assets together and selling them to investors. The investors then hold the securities as investments, and the issuer of the securities receives the proceeds of the sale.<\/p>\n
Pledging is a form of secured lending in which the borrower pledges collateral to the lender as security for the loan. The collateral can be anything of value, such as real estate, equipment, or inventory. If the borrower defaults on the loan, the lender can seize the collateral and sell it to repay the loan.<\/p>\n
None of the above is the correct answer.<\/p>\n","protected":false},"excerpt":{"rendered":"
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