A firm negotiates a(n)_________ with its bank so the firm will have access to a specified amount of unsecured short-term funds,provided the bank has the funds available.

Question

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A line of credit is a type of borrowing agreement between a bank and a firm that provides the firm with access to a specified amount of unsecured short-term funds, provided the bank has the funds available. The firm can draw on the line of credit as needed, and interest is only charged on the amount borrowed. The other options listed are not relevant to this type of borrowing agreement.

A Firm Negotiates A(n)_________ with Its Bank So the Firm