An Amortizing Loan Is One in Which

question 15

Multiple Choice

An amortizing loan is one in which:

• A) the principal remains unchanged with each payment.
• B) accrued interest is paid regularly.
• C) the maturity of the loan is variable.
• D) the principal balance is reduced with each payment.

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Definitions:

Foreign Exchange Gain

A profit derived from the change in exchange rates when converting from one currency to another.

Non-Interest-Bearing Note

A type of debt instrument which does not accrue interest, repaid at its face value at maturity.

U.S. Dollar Equivalent

The value of a foreign currency transaction converted into U.S. dollars at the current exchange rate.

Forward Contract

A financial agreement to buy or sell a specific asset at a predetermined price at a set time in the future.