The Use of Borrowed Funds in an Attempt to Earn

question 36

Multiple Choice

The use of borrowed funds in an attempt to earn a return greater than the cost of borrowing is known as:

• A) gearing or leverage.
• B) capital budgeting.
• C) equity funding.
• D) overdraft financing.

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Definitions:

Negligence

The failure to take reasonable care to prevent harm to others that a reasonably prudent person would have taken under the same circumstances.

Check 21 Act

A U.S. federal law that facilitates check truncation by creating a new type of negotiable instrument called a substitute check.

Electronically

Refers to processes, transactions, or communications that are conducted using electronic devices or over the internet.

Mandatory

Required or obligatory, implying that it must be done or adhered to without choice.