What Does "2/10" Mean,with Respect to "Credit Terms of 2/10,n/30

question 16

Multiple Choice

What does "2/10" mean,with respect to "credit terms of 2/10,n/30"?

• A) A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date.
• B) Interest of 2 percent will be charged if the invoice is paid after 10 days from the date on the invoice.
• C) A discount of 10 percent will be allowed if the invoice is paid within two days of the invoice date.
• D) Interest of 10 percent will be charged if invoice is paid after two days.

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Definitions:

Actively Managed

Refers to investment funds where portfolio managers make specific investments with the goal of outperforming an investment benchmark index.

Mutual Funds

Investment programs funded by shareholders that trade in diversified holdings and are managed by professional investment managers.

Index Funds

Index Funds are mutual funds or exchange-traded funds (ETFs) designed to follow certain preset rules so that the fund can track a specified basket of underlying investments.

Efficient Markets Hypothesis

The Efficient Markets Hypothesis suggests that asset prices in financial markets fully reflect all available information at any given time, making it impossible to consistently achieve higher returns than the overall market.