A Principal Difference Between a Line of Credit and a Revolving

Multiple Choice

A principal difference between a line of credit and a revolving credit agreement is that:

A) a revolver is a legally binding commitment from the bank to lend up to a stipulated amount.
B) the borrower must pay a commitment fee on unborrowed money with a line of credit.
C) the line of credit is an informal agreement but may not be canceled due to a decline in the borrower's financial health during the relatively short period of the agreement.
D) the bank can cancel a revolver at any time if it refunds the commitment fee.