Which of the Following Statements Regarding a Line of Credit

question 139

Multiple Choice

Which of the following statements regarding a line of credit is true?

• A)The purpose for which the money is being borrowed must be stated by the borrower.
• B)A line of credit agreement usually fixes the interest rate that will be applied to any extensions of credit.
• C)A line of credit agreement is a legal commitment on the part of the bank to provide the stated credit.
• D)Such agreements usually cover the borrower's fiscal year.

---

Definitions:

Articles of Incorporation

Legal documents filed with the state government to legally establish a corporation.

Proper Consideration

The requirement in contract law that something of value must be exchanged between the parties to form a valid contract.

Incorporeal Property

Refers to intangible assets owned by an individual or corporation, such as intellectual property, securities, and rights to financial accounts.

Nonprofit Corporation

A type of organization that operates without the purpose of making a profit, typically focusing on charitable, educational, or social missions.