Why Do Some Lenders Require a Firm to "Clean Up

question 19

Multiple Choice

Why do some lenders require a firm to "clean up" their line of credit one month each year?

• A) because such a loan can only be outstanding for a maximum of 11 months
• B) because each year a new rate of interest is applied to the outstanding balance
• C) to help the firm develop a good credit history so it can borrow larger amounts in the future
• D) to ensure the loan is being used for business purposes only

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Definitions:

Norepinephrine

A neurotransmitter and hormone involved in arousal and stress response, also known as noradrenaline.

Serotonin

A neurotransmitter associated with mood regulation, digestion, sleep, and other important bodily functions.

Acetylcholine

A neurotransmitter involved in many functions including muscle contraction and memory.

Upper Brainstem

The part of the brainstem that is closer to the top part of the brain, involved in basic life functions such as consciousness, breathing, and heart rate.