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.

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Definitions:

Jeweler

A person or business that designs, makes, sells, and repairs jewelry and watches.

Clothing Store

A retail establishment that sells garments and apparel for individuals of all ages.

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The process and business of developing land into residential properties, including homes and apartment buildings.

Profits

The financial benefit realized when revenue from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.