Revision-STF

Secured and unsecured loan are loan:

• with collateral : without collateral

• without collateral : with collateral

• with guarantor : without guarantor

• without guarantor : with guarantor

Short term financing includes......

• Hybrid financing, debt financing, long term finance

• Trade credit, secured term loan and unsecured term loan

• Trade credit, debt financing, equity financing

• Debt financing, equity financing, hybrid financing

The type of financing where the firm can buy other firm's account receivable called as

• Commercial paper

• Factoring

• Pledging

• Borrowing

A compensating balance is a minimum deposit that must be maintained in a bank account by a borrower.

• TRUE

• FALSE

Short term finance refers to financing needs for a

• period of time about 1 year or less.

• period over 1 year.

• collateral financing.

• daily business transaction.

the true interest rate that a company or an individual earns or pays over a given period as a result of compounding.

• discount rate

• efficient interest rate

• effective interest rate

• simple interest rate

. 

MakTeh wishes to borrow RM30,000 for one year. The bank offers a simple interest loan at 14% per annum. Calculate the effective annual interest cost (EIR) of the loan.

• 8%

• 10%

• 12%

• 14%

The credit term of 3/15 net 60 explain

• 3 months borrowing with 15% interest charges and payment after 60 months

• 3 months borrowing with 15% interest charges and payment after 60 months

• 3% discount will be given if payment made within 15 days, or full payment in 60 days

• 3% interest charges for 15 days borrowing and payment compulsory on day 60

Calculate: A loan from MeowBank at 13%discount interest and 10% compensating balance required

Which of the following are advantages of commercial paper?

• secured by assets

• issued below prime rate

• no compensating balance

• B and C