ÔN THI 2

In relation to long-term financing, a fully drawn advance is a:

• a bank loan advanced for a precise period for an unspecified purpose.

• A term loan where the full amount is provided at the start of the loan, usually for a specified purpose.

• A term loan where the borrower has the option of putting its operating account in deficit up to an agreed limit.

• A term loan where the bank does not pay out the loan until after a specified period.

If a company wishes to finance a printing press with a five-year life, it would be advisable to finance it with a/an:

• overdraft.

• bank bill.

• commercial paper.

• fully drawn advance.

If a company wished to structure its financing so it repaid funds borrowed only when a project begins to have positive cash flows, it would choose a/an:

• fully drawn advance.

• term loan.

• interest-only loan.

• deferred payment loan.

Long-term debt can be categorised as financing with an initial maturity:

• over 180 days and less than a year.

• between 1 and 3 years.

• over 1 year.

• between 3 and 12 years.

In relation to long-term financing, an amortised loan involves:

• periodic payments principal and interest repaid at maturity.

• periodic interest and principal repayments when positive cash flows begin.

• periodic interest payments and principal repaid at maturity.

• periodic equal repayments of interest and principal throughout the term.

Which of the following statements best describes a fully amortised term loan?

• A fully amortised term loan is an interest-only loan with principal repayable at maturity.

• A fully amortised term loan has periodic repayments, including interest and principal reduction.

• Interest repayments on a fully amortised term loan are fixed for the period of the loan.

• A fully amortised term loan is a ‘low-start' loan whose repayments are increased over the term.

Term loans where each periodic loan payment consists of interest payments and then the principal is repaid in full at maturity are:

• fully drawn advances.

• amortised loans.

• interest-only loans.

• credit foncier loans.

The fees that represent bank costs in considering loan applications and document preparation are called:

• commitment fees.

• establishment fees.

• line fees.

• service fees.

The fees charged by banks onto the total amount of the loan facility and are normally payable in advance are:

• commitment fees.

• establishment fees.

• line fees.

• service fees.

Compared with an amortised loan, a deferred repayment loan involves:

• periodic interest and principal repayments.

• periodic interest and principal repayments when positive cash flows begin.

• periodic interest payments and principal repaid at maturity.

• periodic principal payments and interest repaid at maturity.