Ch.11 Quiz

Instructions
Please read the questions carefully.

This assessment is worth 100 points.

  1. The rate on a promissory note is always stated as a semiannual rate.   (10 points)

      
      

  2. The maker of a promissory note issues the note.   (10 points)

      
      

  3. The maturity value of a non-interest-bearing note is the same as its face value.   (10 points)

      
      

  4. Proceeds of a simple discount note equals amount borrowed less bank discount.   (10 points)

      
      

  5. Lines of credit provide companies with additional financing that is immediately available to them.   (10 points)

      
      

  6. The maturity value of an interest-bearing note is:   (10 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  7. In calculating the bank discount when discounting an interest-bearing note which one of the following is not used in the calculation?   (10 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  8. An $11,000, 12 percent, 40-day note, dated November 3, is discounted at 9 percent on November 30. The proceeds of the note would be:   (10 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  9. A $25,000, 15 percent, 80-day note, dated November 5, is discounted at National Bank on January 5. The discount period is:   (10 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  10. Jay discounts a 100-day note for $25,000 at 13 percent. The effective rate of interest to the nearest hundredth percent is:   (10 points)

    a.  
    b.  
    c.  
    d.  
    e.  



Portions copyright ©2005 The McGraw-Hill Companies.
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.