A prearranged,short-term bank loan up to a specified limit,made on a formal or informal basis,is called a:
A)letter of credit.
B)cleanup loan.
C)compensating balance.
D)line of credit.
E)roll-over.

Question

Quizplus · Accepted Answer

A prearranged, short-term bank loan up to a specified limit made on a formal or informal basis is called a line of credit. A line of credit is often used by businesses to provide flexibility and quick access to funds for working capital needs. The borrower can draw on the line of credit as needed up to the specified limit, and interest is only charged on the amount borrowed.

A Prearranged,short-Term Bank Loan Up to a Specified Limit,made on a Formal