Compared to a line of credit, a revolving credit agreement generally will be
A) a lower cost, higher risk method of short-term borrowing.
B) a lower cost, lower risk method of short-term borrowing.
C) a higher cost, higher risk method of short-term borrowing.
D) a higher cost, lower risk method of short-term borrowing.

Question

Quizplus · Accepted Answer

A revolving credit agreement typically has a higher cost due to commitment fees and interest rates, but it offers more security and reliability, making it a lower risk option compared to a line of credit.

Compared to a Line of Credit, a Revolving Credit Agreement