The Primary Difference Between a Line of Credit and a Revolving

question 38

Multiple Choice

The primary difference between a line of credit and a revolving credit arrangement is the:

• A) type of collateral used to secure the loan.
• B) length of the time period covered by the loan agreement.
• C) fact that the line of credit is a secured loan and the revolving credit arrangement is unsecured.
• D) fact that the line of credit is an unsecured loan and the revolving credit arrangement is secured.
• E) line of credit is a long-term financing agreement while the revolving credit arrangement is a short-term financing agreement.

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Definitions:

Pareto Diagram

A graphical tool used for decision-making that highlights the most significant factors in a data set according to the Pareto principle.

Quality Loss Function

highlights the losses incurred by deviating from the optimal product quality level, emphasizing that loss increases as the product moves away from what is considered the target value.

Cause-and-Effect Diagram

A visual tool for identifying and organizing the potential causes of a problem in order to identify its root causes, also known as a fishbone or Ishikawa diagram.