Ask Question
30 March, 17:19

A bank's commitment (for a specified future period of time) to provide a firm with loans up to a given amount at an interest rate that is tied to a market interest rate is called

A) credit rationing. B) a line of credit. C) continuous dealings. D) none of the above.

+2
Answers (1)
  1. 30 March, 17:47
    0
    credit rationing

    Explanation:

    Credit rationing is a situation in which borrowers give out a fixed amount of loan to lenders for a specified time at a rate tied to the market interest rate. In this situation, loans do not exceed a certain amount from the borrower no matter what attractive offers are given by the lenders to be able to get a larger loan amount. This is done by the borrower becasue the borrower is earning maximum profits from interest rates and also is a means to maintain equilibrum between loan funds and loan demands.

    Cheers.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A bank's commitment (for a specified future period of time) to provide a firm with loans up to a given amount at an interest rate that is ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers