A fiRm Wishes to Obtain Short Term fiNancing at a Rate

question 329

Multiple Choice

A firm wishes to obtain short term financing at a rate significantly below that which a bank would charge. If the firm is large and highly rated, it may be able to meet its needs by _______________.

• A) Obtaining an unsecured committed operating loan.
• B) Obtaining an unsecured non-committed operating loan.
• C) Factoring its receivables.
• D) Obtaining an inventory loan.
• E) Issuing bankers acceptances.

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Definitions:

Federal Preemption

A principle asserting the supremacy of federal legislation over state legislation when both pertain to the same matter.

Concurrent Authority

Jurisdiction that is shared by different government bodies or courts, allowing more than one entity the power to regulate or enforce laws in the same area.

Doctrine

A principle or policy adopted in law or by an organization to guide decision-making and actions.

Full Faith And Credit Clause

The clause of the U.S. Constitution (Article IV, Section 1) mandating that each state must recognize, respect, and enforce the public records, legislative acts, and judicial decisions of the other states.