Multiple choice

Restructuring of debts refers to

  1. swapping less interest loans with more interest loans

  2. clearing more interest loans and paying them with less interest loans

  3. closing all outstanding loans

  4. going for more and more borrowings
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Restructuring of debts refers to clearing more interest loans and paying them with less interest loans.

Debt restructuring is a process that allows a private or public company, or a sovereign entity facing cash flow problems and financial distress to reduce and renegotiate its delinquent debts in order to improve or restore liquidity so that it can continue its operations. 

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