Which of the Following Is a Key Difference Between a Line

question 14

Multiple Choice

Which of the following is a key difference between a line of credit and a revolving credit agreement?

• A)Under a line of credit, the bank involved agrees to make funds available as long as the borrower's credit rating doesn't deteriorate, while in a revolving credit agreement, the bank guarantees that the funds will be available.
• B)Under a line of credit, funds are available for up to a year, while in a revolving credit agreement, funds are available for no more than 90 days.
• C)Under a line of credit, the interest rate on borrowed funds is stated in advance, while in a revolving credit agreement, the interest rate is allowed to "float" based on agreed-upon criteria.
• D)Under a line of credit, the borrower must secure the funds by pledging collateral, but in a revolving credit agreement, the bank involved agrees to make additional funds available as long as the principal and interest are paid.

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Definitions:

Identity

The qualities, beliefs, personality, looks, and/or expressions that make a person (self-identity) or group (particular social category or social group).

Moral Reasoning Ability

The capacity to understand right from wrong and to reason about how to resolve ethical dilemmas.

Temperament

An individual's innate predisposition towards emotional reactivity and intensity, influencing behavior and interactions with the environment.

Cognitive Schemas

Mental structures that an individual uses to organize knowledge and guide cognitive processes and behavior.