Which of the following statement is incorrect?

Group of answer choices

Trade credit is obtained by purchasing materials, supplies, or services on credit.

Most of the answers are correct.

Compensating balance is a specified amount that a lender requires a borrower to maintain in a non-interest-paying account during the life of a loan.

The annual interest rate that reflects the dollars of interest paid divided by the dollars borrowed is known as the stated interest rate.

A line of credit is an informal arrangement and the bank may change a firm's credit limit or withdraw it entirely at any time.