Which of the following bank loan arrangements is typically accompanied by a requirement that the firm maintain a minimum level of deposits with the lending bank and restricts the level of the borrowing firm's working capital?
A) single, end-of-period payment loan
B) bridge loan
C) committed line of credit
D) uncommitted line of credit

Question

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A committed line of credit is typically accompanied by requirements such as maintaining a minimum level of deposits with the lending bank and restricting the level of the borrowing firm's working capital in order to ensure that the borrower is managing its funds appropriately. A single, end-of-period payment loan and a bridge loan do not typically have these requirements, while an uncommitted line of credit does not require the borrower to borrow at all.

Which of the Following Bank Loan Arrangements Is Typically Accompanied