Exam 27: Finance Companies

In factoring,a finance company makes a loan and

What factors explain the existence of finance companies,given that banks already provide loans,credit,and so forth?

Which of the following is not an advantage of a lease financing arrangement?

In which industry is a floor plan common practice?

In which industry is factoring a common practice?

Consumer finance companies typically make loans to consumers who

Factoring refers to purchasing a firm's accounts receivables at a premium.

Installment credit is a loan that requires the borrower to make a series of equal payments over some fixed length of time.

On average,finance companies have a capital-to-total-asset ratio that is ________ than that of banks and savings and loans.

Although finance companies are largely unregulated,they do face some regulations aimed primarily at

What are the various types of finance companies?

Lease financing is an example of a business financing need not served by most banks.

The earliest examples of finance companies date back to the beginning of the ________ when retailers offered installment credit to customers.

In 2013,the largest portion of loans made by finance companies was ________,representing 60% of the loans.

Consumer finance companies make loans to borrowers who would not qualify for bank loans due to low income or poor credit.

As presented in the Consolidated Finance Company Balance Sheet,the largest asset of finance companies is consumer loans,representing ________ of assets.

Many retailers established finance companies to provide financing for their customers.Although these finance subsidiaries did increase sales,the subsidiary was typically unprofitable.

What is default risk?

Finance companies essentially sell commercial paper and use the proceeds to make loans.

What is liquidity risk?