5. A loan for a very short period is called
(a) call loan
(b) cash loan
(c) treasure bill
(d) None of the above
Answers
Answer:
The market for extremely short period loan is called call
(a) Call Loan
Explanation:
A call loan is one for which the lender has the right to demand repayment at any moment. It's "callable" in the same way as a callable bond is. The main difference between a call loan and a callable bond is that with a call loan, the lender, not the borrower, has the right to call in the loan repayment.
A Treasury Bill (T-Bill) is a one-year or less U.S. government debt obligation guaranteed by the Treasury Department. T-bill maturities range from a few days to 52 weeks, although the most typical maturities are 4, 8, 13, 26, and 52 weeks.
A cash flow loan is an unsecured loan that is used to fund a small business's day-to-day operations. The loan is used to fund working capital—inventory, wages, rent, and other expenses—and is repaid with the company's incoming cash flows.