Which one of the following statements is correct?
A) The assignment of receivables involves selling accounts receivables at full price.
B) Lines of credit frequently require a cleanup period.
C) With maturity factoring, the borrower receives the loan amount immediately.
D) Commercial paper is short-term financing offered to highly rated corporations by major banks.
E) Credit card receivables funding is a relatively inexpensive method of borrowing on a short-term basis.

Question

Quizplus · Accepted Answer

Lines of credit often come with a requirement for a cleanup period, which is a stipulated time frame during which the borrower must reduce the outstanding balance to zero or a specified amount. This ensures that the line of credit is not used as a permanent source of financing.

Which One of the Following Statements Is Correct