When a commercial bank extends short-term credit to a firm, it can provide a line of credit that involves
A) a legal obligation on the part of the bank to provide the stated credit.
B) no legal obligation on the part of the bank to provide the stated credit.
C) the requirement that the borrower maintain a compensating balance with the bank throughout the loan period.
D) a fixed rate of interest.
Correct Answer:
Verified
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