Which of the Following Comparisons Between Short-Term Bank Loans Is

question 34

Multiple Choice

Which of the following comparisons between short-term bank loans is correct?

• A) Commercial paper interest rates are usually slightly higher than rates on bank loans.
• B) Commercial paper is only appropriate for firms requiring a limited amount of short-term financing, while banks can offer substantially larger amounts of funds.
• C) Banks demand that borrowers meet exacting credit-worthiness tests, while the lenders that purchase commercial paper are less strict. Only the most credit-worthy borrowers have access to bank loans.
• D) Commercial paper is less flexible than a line of credit, but the interest rate is lower.

---

Definitions:

Revoke

To officially withdraw, cancel, or annul a decision, permit, or law.

Testator's Signature

The signature of the individual who has made a will, which is necessary for its validity.

Joint Tenancy

A form of co-ownership where two or more individuals own property together with right of survivorship, meaning upon the death of one owner, the property automatically passes to the surviving owner(s).

Probate Process

The legal process through which a deceased person’s estate is validated and administered, involving the resolution of claims and distribution of the estate under a valid will or state law.