If a Firm Has Set Up a Revolving Credit Agreement

question 12

True/False

If a firm has set up a revolving credit agreement with a bank, the risk to the firm of being unable to obtain funds when needed is lower than if it had an informal line of credit.

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Definitions:

Translation Exposure

The potential risk of value change in a company's financial statements due to the conversion of foreign currencies into the domestic currency in consolidation.