Rami Has a Long-Standing Relationship with His Banker

question 43

Multiple Choice

Rami has a long-standing relationship with his banker. When his company needs a short-term loan, he is able to obtain a loan at prime rate and does not have to put up any collateral for the loan. What type of financing has Rami obtained?

• A) unsecured loan
• B) secured loan
• C) promissory note
• D) trade credit

---

Definitions:

Security Interest

A legal claim or lien on collateral, ensuring an entity or individual (the secured party) to collect on a debt or obligation.

Collateral

An asset offered by a borrower to secure a loan, which the lender can seize if the borrower fails to repay the debt.

Farm Products

Goods that are produced through agriculture, such as crops, livestock, and the products derived from them.

Documents of Title

Legal documents that provide proof of a person's rights to control the disposition of goods or property, such as bills of lading or warehouse receipts.