1. What are the major factors that influence the effective cost of a term loan?
2. Define the following and give an example of each:
a. Affirmative covenants
b. Negative covenants
c. Restrictive covenants
3. What institutions are the primary suppliers of business term loans?
4. Define the following:
a. A conditional sales contract
b. A chattel mortgage
5. Under what conditions would a firm prefer the following:
a. A "fixed-rate" term loan from a bank
b. A "floating-rate" term loan, with the rate tied to the bank's prime rate