A Type of Short-Term Loan Where the Borrower Sells Its

question 86

Multiple Choice

A type of short-term loan where the borrower sells its receivables to the lender up-front, but at a discount to face value, is called:

• A) A compensating balance.
• B) Assigned receivables financing.
• C) A letter of credit.
• D) Factored receivables financing.
• E) A bond.

---

Definitions:

Longshore Current

A current that runs parallel to the shore, generated by waves hitting the shoreline at an angle.

Spit

A small point or low ridge of sand or gravel projecting from the shore into a body of water.

Wave-cut Platform

A flat, often wide area at the base of a cliff created by the erosion of waves at the shore.

Estuaries

Coastal bodies of water where fresh water from rivers meets and mixes with salt water from the ocean.