The Primary Difference Between a Line of Credit and a Revolving

question 77

Multiple Choice

The primary difference between a line of credit and a revolving credit arrangement is the:

• A) type of collateral used to secure the loan.
• B) length of the credit period.
• C) fact that the line of credit is a secured loan and the revolving credit arrangement is unsecured.
• D) fact that the line of credit is an unsecured loan and the revolving credit arrangement is secured.
• E) loan's classification as either a committed or a non-committed loan.

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Definitions:

Large-company Stocks

Equities issued by corporations with a large market capitalization, often considered more stable investments than those of smaller companies.

Treasury Bills

Short-term government securities with maturities of one year or less, sold at a discount from their face value.

Weak Form Efficient

A form of market efficiency that asserts all past prices of a stock are reflected in its current price, hence technical analysis cannot predict future movements.

Insider Information

Confidential information about a company that has not been made public and is used by someone to gain an advantage in the stock market.