When an Investment Pays Only Simple Interest, This Means

question 35

Multiple Choice

When an investment pays only simple interest, this means:

• A)The interest rate is lower than on comparable investments
• B)The future value of the investment will be low
• C)The earned interest is non-taxable to the investor
• D)Interest is earned only on the original investment

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Definitions:

Start-up Firms

A newly established company that is in the phase of developing and bringing to market a new product or service.

Going Public

The process by which a privately held company offers its shares to the public for the first time, through an initial public offering (IPO).

Market Value

The present rate at which a service or asset is available for sale or purchase in the open market.

Liquid Market

A market with a high level of trading activity, where assets can be bought or sold quickly without causing a significant change in their price.