The Main Difference Between Promissory Notes and BABs Is That

question 36

Multiple Choice

The main difference between promissory notes and BABs is that:

• A)the yield on promissory notes is considered a 'risk-free' rate
• B)promissory notes trade at a common yield
• C)BABs are much riskier because the borrowers are less creditworthy
• D)BABs are accepted before they are issued
• E)All of these.

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Definitions:

Debt Financing

The process of raising capital through borrowing money, which must be repaid with interest.

Crowd Sourcing

The practice of obtaining information, ideas, or content by soliciting contributions from a large group of people, typically from the online community, rather than from traditional employees or suppliers.