Which of the following is a method to manage credit risk?

Conducting thorough credit assessments is a crucial method for managing credit risk because it enables businesses to systematically evaluate the creditworthiness of potential customers before extending credit. This process typically involves analyzing a customer's credit history, financial statements, payment patterns, and overall financial health. By performing these assessments, companies can identify high-risk customers, make informed decisions about extending credit, and set appropriate credit limits. This proactive approach helps mitigate the likelihood of default and contributes to a healthier cash flow.

Other methods listed, such as ignoring overdue accounts or setting no credit limits, would likely exacerbate credit risk rather than manage it. These practices can result in uncollectible accounts, negatively impacting a company's financial position. Similarly, relying solely on high-interest loans does not assess credit risk properly and may lead to unsustainable financial conditions for both the lender and borrower. Thus, thorough credit assessments stand out as a proactive and responsible method for managing credit risk effectively.