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Questions and Answers
What is the typical repayment condition for bank overdrafts?
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?
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?
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?
How do larger companies' credit ratings affect overdraft interest rates?
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What type of companies can raise short term funds by issuing commercial notes?
What type of companies can raise short term funds by issuing commercial notes?
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