A key difference between a line of credit and a revolving credit agreement is that under a line of credit:
A) the bank agrees to make funds available as long as the borrower's credit rating doesn't deteriorate, while in a revolving credit agreement, the bank guarantees that the funds will be available.
B) the funds are available for up to a year, while under a revolving credit agreement the funds are available for no more than 90 days.
C) the interest rate on the borrowed funds is stated in advance, while in a revolving credit agreement the interest rate is allowed to "float" based on agreed upon criteria.
D) the borrower must secure the funds by pledging collateral, but with a revolving credit agreement, the bank agrees to make additional funds available as long as the principal and interest are paid.
Correct Answer:
Verified
Q153: _ is a shortterm unsecured, promissory notes
Q154: When a firm reinvests some of its
Q155: Violet Shades and Raindew are two companies
Q156: The main disadvantage of financial leverage is
Q157: A large, wellestablished company with an impeccable
Q159: Financing provided by a firm's owners is
Q160: Which of the following is characteristic of
Q161: Which of the following is not a
Q162: The Chief Financial Officer of Violet Motors
Q163: The DoddFrank Act requires large firms in
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents