Opal Signs a Promissory Note Payable to the Order of Payday

question 79

Multiple Choice

Opal signs a promissory note payable to the order of Payday Loan Company. The note states that it is payable "with interest at the legal rate." This note is

• A) negotiable.
• B) nonnegotiable, because it does not specify a rate of interest.
• C) nonnegotiable, because it is a promissory note.
• D) nonnegotiable, because it is payable only with interest.

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Definitions:

Expected Returns

The average amount of profit or loss an investment is expected to generate, based on historical data.

Portfolio Weights

The percentage composition of a particular holding relative to the total investment portfolio.

Risk-To-Reward Ratio

A benchmark used by investors to gauge the prospective returns of an investment in comparison to the risk associated with securing those returns.

Efficient Market

A type of market where all relevant information is rapidly and correctly reflected in securities prices, allowing them to be bought and sold at their fair value.