Which of the Following Is True of a Line of Credit

question 8

Multiple Choice

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

• A)It is a short-term,zero-coupon note issued by major corporations.
• B)It is an arrangement in which the firm is allowed to pay down the loan and then subsequently increase the amount of borrowing.
• C)It is an arrangement where the bank will lend up to a maximum pre-specified loan amount at a pre-specified interest rate,as long as the firm meets the requirements established initially.
• D)It is an arrangement with a bank whereby the bank authorizes the maximum loan amount,but not the interest rate,when commitment was drawn up.

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Definitions:

Null Hypothesis

A hypothesis that there is no significant difference between specified populations, any observed difference being due to sampling or experimental error.

Sample Data

A subset of data collected from a larger population, used to analyze and make inferences about that population.

Analysis Of Variance

A statistical method used to compare and analyze the differences among group means in a sample.

ANOVA

A statistical method used to compare the means of three or more samples to determine if at least one of the sample means is significantly different from the others.