Which of the Following Statements Regarding a Line of Credit

question 47

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 bo fiscal year.

---

Definitions:

Donee Beneficiary

A third party who benefits from a contract between two other parties, especially in cases where the contract is intended as a gift to the third party.

Second-party Beneficiary

A person or group that benefits from a contract, despite not being a direct party to that contract.

Anti-assignment Clause

A provision in a contract that prohibits the transfer of rights or delegation of duties by a party to the agreement without prior consent from the other party.

Debris

Dispersed pieces, usually from something that has been demolished or ruined.