Which of the Following Statements Is Correct About a Corporation

question 6

Multiple Choice

Which of the following statements is correct about a corporation that borrows from its bank at "Prime plus one %?" The interest rate:

• A)is set at a level of the prime rate at initiation of the loan, plus one %.
• B)can fluctuate up to 1 % upwards over the life of the loan.
• C)can be changed upwards but not downwards over the life of the loan.
• D)can be changed upwards or downwards in accordance with prime rate changes over the life of the loan.

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Definitions:

Budget Constraint

A financial limitation that defines the combination of goods and services an individual can afford to purchase given their income and the prices of those goods and services.

Income

The financial gain acquired by an individual or a company, which is typically calculated on an annual basis and obtained through work, investments, or business operations.

Nuts

Plant-derived kernels rich in fats, protein, and other nutrients, typically consumed raw or roasted.

Berries

Small, juicy fruits that are typically round, brightly colored, and sweet or sour in taste.