In banking and finance, medium term loans are normally provided for which one of the following periods?

Introduction / Context:
Loans are often classified into short term, medium term and long term based on their maturity period. This classification is important for businesses, banks and exam questions on finance. While the exact cut off points may vary slightly in different contexts, there are commonly accepted ranges. This question asks you to identify the period that best matches the definition of a medium term loan.

Given Data / Assumptions:
- Four different time ranges are given as options, all measured in months or years.
- Short term loans are usually up to about 12 or 15 months, medium term loans extend beyond that up to several years, and long term loans run for many years beyond that.
- You must choose the option that captures the typical range for medium term loans used in many banking and exam references.

Concept / Approach:
In many standard descriptions, short term loans cover periods up to about 12 or 15 months. Medium term loans usually cover periods from about 15 months to anywhere between three and five years, depending on the classification used in the course or exam. Long term loans extend beyond that. Among the options, the range starting from 15 months and extending to 4 years best represents a medium term category that clearly excludes very short and very long maturities.

Step-by-Step Solution:
Step 1: Option A, 1 year to 2 years, begins at 12 months, which is often considered the upper bound for short term borrowing, and stops at 2 years. This leaves out many loans between 2 and 4 years that are typically classified as medium term.Step 2: Option B, 15 months to 3 years, is close to a medium term definition but restricts the upper bound to 3 years, which may be on the lower side for some classifications.Step 3: Option C, 15 months to 4 years, starts just above short term territory and extends to a reasonable upper limit for medium term loans, comfortably separating them from long term borrowings such as those used for large infrastructure projects.Step 4: Option D, 1 year to 3 years, again includes the 1 year point which many textbooks still count within short term, making it a less precise fit for a purely medium term category.

Verification / Alternative check:
You can check your answer against common examples. Working capital loans or trade credit for a few months are short term. Car loans, small machinery loans and some educational loans with maturities of two to four years are often described as medium term. Housing loans of fifteen or twenty years are clearly long term. The range from about 15 months to 4 years, as given in option C, aligns best with these examples of medium term uses.

Why Other Options Are Wrong:
Option A is wrong because it makes the medium term window too narrow and starts at a maturity that is still often considered short term. Option B is wrong because it restricts the upper limit to 3 years, excluding many loans of three to four years that are still medium term in many definitions. Option D is wrong because it does not clearly separate short term and medium term by including 1 year.

Common Pitfalls:
Students sometimes memorise only a single cut off, such as short term up to one year and long term beyond three years, and then guess the medium term range without checking both the lower and upper bounds. It is safer to remember that medium term loans sit between short and long term and usually start slightly above one year, extending up to a few years depending on the context.

Final Answer:
Medium term loans are commonly provided for a period of 15 months to 4 years.