Bank Credit in Nigeria

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Questions and Answers

What is the typical repayment condition for bank overdrafts?

  • Repayable after a year without notice
  • Repayable only during 'credit squeeze' conditions
  • Repayable immediately without notice
  • Repayable on demand with reasonable notice (correct)

How are bank credit interest rates tied?

  • To fixed government rates
  • To other market rates of interest (correct)
  • To the company's credit rating
  • To the company's revenue

What is a characteristic of commercial paper?

  • Dependent on government regulation
  • Only available to small companies
  • Unsecured money market instrument (correct)
  • Secured long-term investment

How do larger companies' credit ratings affect overdraft interest rates?

<p>They may pay overdraft interest at the bank's PRIME rate (C)</p> Signup and view all the answers

What type of companies can raise short term funds by issuing commercial notes?

<p>Larger companies with good credit rating (C)</p> Signup and view all the answers

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