Binder and Sons Borrowed $138,000 for Three Years from Their

question 54

Multiple Choice

Binder and Sons borrowed $138,000 for three years from their local bank and now they are paying monthly payments that include both principal and interest.Paying off debt by making instalment payments,such as this firm is doing,is referred to as:

• A)foreclosing on the debt.
• B)amortizing the debt.
• C)funding the debt.
• D)calling the debt.
• E)refunding the debt.

---

Definitions:

Vivid Observations

Highly detailed and clear observations, typically used to convey intricate details in a way that is easy to visualize and understand.

Asymmetric Information

A scenario where one participant in a deal possesses greater or more advanced information than the other.

Adverse Selection

A situation where uneven information leads to transactions between parties where one party has more or better information than the other, often seen in insurance markets.

Occur

To happen or take place, referring to events or phenomena.