A ________ guarantees the borrower that a specified amount of funds will be available regardless of the scarcity of money.
A) revolving credit agreement
B) mortgage loan
C) short-term, self-liquidating loan
D) single payment note

Question

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A revolving credit agreement is a type of credit facility that provides the borrower with a certain amount of funds that can be drawn upon as needed, up to a pre-determined limit. This type of credit agreement guarantees the borrower that they will have access to funds, even if there is a scarcity of money. As the borrower repays the borrowed amount, the credit becomes available again, and the borrower can draw on it again if needed. Other types of loans, such as a mortgage loan or a single payment note, do not typically offer the same level of guarantee that funds will be available regardless of the scarcity of money. A short-term, self-liquidating loan is a type of loan that is expected to be repaid quickly and is typically used to finance short-term projects. It may not offer the same level of guarantee as a revolving credit agreement.

A ________ Guarantees the Borrower That a Specified Amount of Funds