A Loan Is

question 18

Multiple Choice

A loan is:

• A) a financial asset that represents partial ownership of a company.
• B) a payment made periodically to all shareholders of a company.
• C) an agreement in which a lender gives money to a borrower in exchange for a promise to repay the amount loaned plus an agreed-upon amount of interest.
• D) a promise by the bond issuer to repay the loan, at a specified maturity date, and to pay periodic interest at a specific percentage rate.

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Definitions:

Creditors' Claims

Legal rights or assertions by lenders or creditors to collect what is owed to them by debtors.

Chapter 11

A provision of the United States Bankruptcy Code that allows businesses to reorganize and restructure their debts under the supervision of the court.

Automatic Stay

A legal provision that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy.

Collection Proceedings

The legal process initiated by creditors to recover debts from borrowers through formal legal actions, including lawsuits, garnishments, and property liens.