Which of the following is true of a line of credit?
A) It is a short-term,zero-coupon note issued by major corporations.
B) It is an arrangement in which the firm is allowed to pay down the loan and then subsequently increase the amount of borrowing.
C) It is an arrangement where the bank will lend up to a maximum pre-specified loan amount at a pre-specified interest rate,as long as the firm meets the requirements established initially.
D) It is an arrangement with a bank whereby the bank authorizes the maximum loan amount,but not the interest rate,when commitment was drawn up.
Correct Answer:
Verified
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