A revolving credit agreement:
A)is similar to a line of credit except that it is binding on the bank.
B)does not guarantee the availability of funds.
C)requires the lender to pay a commitment fee.
D)Both a& c.
E)All of the above

Question

Quizplus · Accepted Answer

A revolving credit agreement is similar to a line of credit in that it provides flexible access to funds that can be borrowed and repaid as needed, but it is binding on the bank, meaning that the bank is required to lend the funds when requested. However, the agreement does not guarantee the availability of funds, and the lender typically charges a commitment fee for maintaining the line of credit. Therefore, choice D is the best answer.

A Revolving Credit Agreement