Match the Term with Its Definition

question 1

Multiple Choice

Match the term with its definition.
-An installment loan from a seller of machinery used by a business

• A)asset-based loan
• B)basis point
• C)equipment loan
• D)LIBOR (London InterBank Offered Rate)
• E)line of credit
• F)prime rate (base rate)
• G)purchase-order financing
• H)term loan

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Definitions:

Retirement Savings Plan (RSP)

A financial arrangement designed to help individuals save for their retirement, often with tax advantages.

Compounded Monthly

The process of earning interest on both the original deposit and the accumulated interest from previous periods, calculated on a monthly basis.

Trust Fund

A legal arrangement in which assets are held by a third party for the benefit of another party or parties.

Compounded Quarterly

A financial term meaning the interest earned on an investment is calculated and added to the principal every three months, leading to the interest earning interest in subsequent quarters.