1. Which of the following is NOT a reason why a company may choose to pledge accounts receivable?

a) A lower interest rate.

b) The borrowing capacity fluctuates with accounts receivable.

c) It provides another source of financing for companies with lower credit ratings.

d) All of these are reasons for pledging accounts receivable.

2. Approximately 40% of all short-term financing is in the form of loans from the bank.

True or False