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Which is most likely to represent revolving debt? You took out $150k in loans to go to law school You have a personal business line of credit for a small online business you You own an investment property in Tampa, FL and buy another one with 20 A mortgage on your primary home in NYC

Which is most likely to represent revolving debt? You took out $150k in loans to go to law school You have a personal business line of credit for a small online business you You own an investment property in Tampa, FL and buy another one with 20 A mortgage on your primary home in NYC

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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**Question: Which is most likely to represent revolving debt?** - ○ You took out $150k in loans to go to law school - ○ You have a personal business line of credit for a small online business you started - ○ You own an investment property in Tampa, FL and buy another one with 20% down - ○ A mortgage on your primary home in NYC **Explanation:** The question is designed to help learners understand the concept of revolving debt, wherein a borrower has an open-ended loan with a credit limit they can borrow against repeatedly, as long as they make regular payments. The options provided focus on different types of borrowing.
Transcribed Image Text:**Question: Which is most likely to represent revolving debt?** - ○ You took out $150k in loans to go to law school - ○ You have a personal business line of credit for a small online business you started - ○ You own an investment property in Tampa, FL and buy another one with 20% down - ○ A mortgage on your primary home in NYC **Explanation:** The question is designed to help learners understand the concept of revolving debt, wherein a borrower has an open-ended loan with a credit limit they can borrow against repeatedly, as long as they make regular payments. The options provided focus on different types of borrowing.
Expert Solution
Step 1: Define=debt

Small business required debt and credits for doing payments and these have shortage of money and hence require liquidity for business.

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