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Manisha Patel
on Nov 07, 2024

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Considering the 5 C's of credit, what does conditions signify?

A) The customer's willingness to meet credit obligations.
B) The customer's ability to meet credit obligations out of operating cash flows.
C) The customer's financial reserves.
D) A pledged asset in the case of default.
E) General economic conditions in the customer's line of business.

5 C's of Credit

Refers to the five key elements a lender considers when assessing the creditworthiness of a potential borrower: character, capacity, capital, collateral, and conditions.

Conditions

Specific terms or requirements outlined in an agreement or contract, which must be met for the agreement to be fully enforceable.

Economic Conditions

The state of the economy at a certain time, including factors like inflation, employment rates, and GDP growth.

  • Understand the components of the 5 C's of credit (Character, Capacity, Capital, Collateral, Conditions) and their role in evaluating credit.
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Gianna MitchellNov 14, 2024
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