Question

Commercial bank term loans:

a)are offered to superior credit applicants.

b)usually carry fixed interest rates.

c)are very short-term in nature and are offered to superior credit applicants.

d)are very short-term in nature.

Answer 1

Answer:

c) are very short-term in nature and are offered to superior credit applicants.

Explanation:

Commercial bank term loans are most often used for short-term funding needs and granted to creditworthy applicants only.

The loan interest may be fixed or floating subject to applicants’ choices.

(a) Is correct but not enough compared to (c)

(b) Is not correct because it can carry floating rate also

(c) Totally correct in term of length and applicant

(d) Is correct but not enough compared to (c)