Match the term with its definition.
-A line of credit secured by working capital assets
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

An asset-based loan is a line of credit secured by working capital assets such as inventory or accounts receivable.

Answer: B 
 A basis point is a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument.

Answer: C
 An equipment loan is a loan used to purchase or finance equipment for a business.

Answer: D
 LIBOR (London InterBank Offered Rate) is an interest rate benchmark used to set the rates on various financial products such as loans, mortgages, and derivatives.

Answer: E
 A line of credit is a flexible loan arrangement in which a lender makes funds available to a borrower up to a certain limit, which can be drawn upon as needed.

Answer: F
 The prime rate or base rate is the interest rate that commercial banks charge their most creditworthy customers, often used as a reference rate for other loans.

Answer: G
 Purchase-order financing is a financing arrangement where a lender provides funds to a business to fulfill a purchase order, typically used by businesses with limited capital.

Answer: H
 A term loan is a traditional loan with a set repayment schedule, typically used for long-term investments such as purchasing real estate or expanding a business.

Match the Term with Its Definition