An Important Difference Between Revolving Credit and a General Line

question 44

Multiple Choice

An important difference between revolving credit and a general line of credit is

• A)that a bank has a legal obligation to honor a general line of credit.
• B)that a bank receives a commitment fee for guaranteeing the funds under a general line of credit.
• C)the commitment fees on a general line of credit are generally higher than the commitment fees on a revolving line of credit.
• D)that a bank has a legal obligation to honor a revolving line of credit.
• E)that there are no differences between a general line of credit and a revolving line of credit.

---

Definitions:

Shared Variance

The portion of variance in a set of variables that is common across those variables, indicating the degree to which they are related.

Karl Pearson

A British mathematician and biometrician known for founding the discipline of mathematical statistics.

Product-moment

Refers to a correlation coefficient developed by Karl Pearson that measures the strength and direction of a linear relationship between two variables.

Negative Correlation

A linkage between two variables that shows one increasing while the other decreases.