Which of the Following Statements About Loan Terminology Is Correct

question 125

Multiple Choice

Which of the following statements about loan terminology is correct?

• A)Loan covenants are the collateral provided by a borrower to a lender as security on a loan.
• B)A secured loan means that the borrower has a pre-approved line of credit backing the debt.
• C)Lenders can revise loan terms if a borrower violates a loan covenant.
• D)All companies are able to establish lines of credit which will allow them to borrow money as needed,up to a prearranged limit.

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Definitions:

BMW

A German multinational corporation that produces luxury vehicles and motorcycles.

Sued By Principal

The action where a principal, often in a legal or business context, initiates a lawsuit against another party.

Default

The failure to fulfill a legal obligation, such as not making a payment on a loan.

Third Party

An entity or individual that is not directly involved in a legal agreement or transaction but may be affected by it or play a role in its execution.