1. we are asked that:

(a) Why would a firm borrow bank funds at higher rates instead of issuing commercial paper?

(b) Who is able to issue commercial paper and for what purpose?

(c)How do bankers' acceptances differ from commercial paper as a means of financing?

(d) Compare and contrast a line of credit and a revolving credit agreement.

(e) Would you rather have your loan on a "collect basis" or a "discount basis" if you were a borrower, all other things being the same? If you were a lender?

(f) What determines whether a lending arrangement is unsecured or secured?

(g) As a lender, how would you determine the percentage you are willing to advance against a particular type of collateral?

(h) As a financial consultant to a company, how would you go about recommending whether to use an assignment of accounts receivable or a factoring arrangement?

(i) List assets that you would accept as collateral on a short-term loan in your order of preference. Justify your priorities.