What is the advantage of a line of credit over a regular loan?
A) collateral is not needed
B) the time frame is longer
C) interest in not charged on unused amounts
D) there is no need for a compensating balance
E) commercial paper is easier to issue
Answer: C
Explanation: Once a line of credit has been established, the business may obtain unsecured loans for any amount up to that limit. The key advantage of a line of credit over a regular loan is that interest (or at least full interest) is usually not charged on the untapped amount.
You might also like to view...
An insurer may NOT contest an individual life insurance policy after it has been in force for how long?
A) The insurer can contest the policy for the life of the policyholder B) 30 days C) 2 years D) 1 year"
Which of these is an issue related to the social-psychological context in which performance appraisal takes place?
A) pay levels B) the role of organizational strategy C) the use of critical incidences to generate BARS items D) employee participation in the appraisal process