A Contract That Is Negotiated Directly Between a Borrowing Firm

question 45

Multiple Choice

A contract that is negotiated directly between a borrowing firm and a bank and under which the borrower agrees to make a series of interest and principal payments to the bank on specific dates is called:

• A)preferred stock.
• B)commercial paper.
• C)convertible debt.
• D)a term loan.
• E)a bond issue.

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Definitions:

Capital

In economic terms, refers to wealth in the form of money or other assets owned by a person or organization or available for purposes such as starting a company or investing.

Commodities

Goods or services that are traded, often produced to satisfy wants or needs.

Class-in-Itself

A term referring to a social class that shares common economic interests, but may not be united or aware of their shared circumstances or potential for collective action.

Economic Position

An individual's or group's status or rank in the economic hierarchy, determined by wealth, occupation, education, and income.