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If a Bank Loan Officer Were Considering a Company's Loan

Question 42

Multiple Choice

If a bank loan officer were considering a company's loan request, which of the following statements would you consider to be CORRECT?


A) The lower the company's inventory turnover ratio, other things held constant, the lower the interest rate the bank would charge the firm.
B) Other things held constant, the higher the days sales outstanding ratio, the lower the interest rate the bank would charge.
C) Other things held constant, the lower the debt ratio, the lower the interest rate the bank would charge.
D) The lower the company's TIE ratio, other things held constant, the lower the interest rate the bank would charge.
E) Other things held constant, the lower the current ratio, the lower the interest rate the bank would charge the firm.

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