A 1-Year,$15,000,12 Percent Note Is Signed on April 1

question 46

Multiple Choice

A 1-year,$15,000,12 percent note is signed on April 1.If the note is repaid on September 1 of the same year,how much interest expense is incurred?

• A)$1,800
• B)$900
• C)$750
• D)$600

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Definitions:

Fama and French

Scholars who developed a three-factor model for explaining the risk and return of stocks and other investments.

Econometrics

The application of statistical and mathematical theories to economics for the purpose of testing hypotheses and forecasting future trends.

Asset Betas

Measure the sensitivity of an asset's returns to market returns, representing the systematic risk of assets not attributable to market-wide movements.

Average Excess Returns

The average return on an investment above the return of a benchmark or risk-free asset.