Which pair of phrases correctly matches the specific type of loan with the broader category it best fits?A.Credit card — Long-term loanB.Mortgage — Long-term loanC.Student loan — Short-term loanD.Line of credit — Alternative financing
Question
Which pair of phrases correctly matches the specific type of loan with the broader category it best fits?A.Credit card — Long-term loanB.Mortgage — Long-term loanC.Student loan — Short-term loanD.Line of credit — Alternative financing
Solution
The correct pair that matches the specific type of loan with the broader category it best fits is B. Mortgage — Long-term loan.
Here's why:
A. Credit card — This is not a long-term loan. Credit cards are a form of revolving credit, not a long-term loan.
B. Mortgage — This is indeed a long-term loan. Mortgages are typically paid back over many years, often 15 or 30.
C. Student loan — This is not a short-term loan. Student loans, like mortgages, are typically paid back over many years.
D. Line of credit — This is not alternative financing. A line of credit is a standard type of loan product offered by many banks.
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