The Most Common Means of fiNancing a Temporary Cash Deficit

question 99

Multiple Choice

The most common means of financing a temporary cash deficit is a:

• A)long-term secured bank loan.
• B)short-term secured bank loan.
• C)short-term issue of corporate bonds.
• D)long-term unsecured bank loan.
• E)short-term unsecured bank loan.

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Definitions:

Return Requirement

The minimum expected rate of return an investor aims to achieve when investing in a particular asset, based on its risk profile and market conditions.

Student Loans

Financial borrowings aimed at financing higher education expenses, which must be repaid by the borrower.

Interest Rate

The part of a loan charged as interest to the borrower, typically demonstrated as an annual percentage of the unsettled loan portion.

Monthly Payment

A regularly scheduled payment that is often used to repay loans over a specific period of time.