With a Floating-Rate Note, the Interest Rate on the Note

question 169

Multiple Choice

With a floating-rate note, the interest rate on the note changes

• A) when the risk level of the borrower changes.
• B) when the prime rate changes.
• C) when the demand for loans changes.
• D) when bank profits change.

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Definitions:

Depreciation Estimates

Projections made regarding the decrease in value of a fixed asset over time, affecting financial statements and tax liabilities.

Residual Value

The anticipated worth of an asset upon reaching the conclusion of its serviceable life.

Double-Declining-Balance

An accelerated method of depreciation which doubles the regular depreciation amount, reducing the value of an asset more quickly in its early years.

Depreciation Expense

The orderly apportionment of a tangible asset's cost over the duration of its use.