Which of the Following Are TRUE of Fixed Payment Loans

question 63

Multiple Choice

Which of the following are TRUE of fixed payment loans?

• A)The borrower repays both the principal and interest at the maturity date.
• B)Installment loans and mortgages are frequently of the fixed payment type.
• C)The borrower pays interest periodically and the principal at the maturity date.
• D)Commercial loans to businesses are often of this type.

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Definitions:

Market Value

The current value at which an asset or company can be bought or sold on the open market.

Financial Position

A company's monetary resources and obligations at a given point in time, reflected in its balance sheet.

Net Working Capital

The gap between a firm's existing assets and its immediate liabilities, showing the company's short-term financial stability.

Accounts Receivable

Financial dues customers hold with a company for the provision of goods or services, awaiting recompense.