Match the term with its definition.
-An informal agreement between a borrower and a bank as to the maximum amount of funds the bank will provide at any one time
A)asset-based loan
B)basis point
C)equipment loan
D)LIBOR (London InterBank Offered Rate)
E)line of credit
F)prime rate (base rate)
G)purchase-order financing
H)term loan

Question

Quizplus · Accepted Answer

A line of credit is an informal agreement between a borrower and a bank as to the maximum amount of funds the bank will provide at any one time.

Answer: A
 An asset-based loan is a type of loan secured by collateral, such as inventory, accounts receivable, or property.

Answer: D
 LIBOR (London InterBank Offered Rate) is the interest rate that banks charge each other for short-term loans in the London market.

Answer: F
 The prime rate (base rate) is the interest rate that commercial banks charge their most creditworthy customers.

Answer: G
 Purchase-order financing is a type of financing in which a lender advances funds to a business to pay for goods or services that have been ordered but not yet received.

Answer: C
 An equipment loan is a type of loan used to finance the purchase of equipment, such as machinery or vehicles.

Answer: H
 A term loan is a type of loan that is repaid over a set period of time, with a fixed or floating interest rate.

Match the Term with Its Definition