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Questions and Answers
Which of the following best describes the concept of debt?
Which of the following best describes the concept of debt?
- A concept of exchanging favors without any expectation of repayment
- A concept of borrowing money without the need to repay it
- A concept of lending money with the expectation of receiving a favor in return
- A concept of lending money with a promise to pay back the principal amount plus an agreed rate of return (correct)
In the equation Δ = X * R% *3/12, what does R% represent?
In the equation Δ = X * R% *3/12, what does R% represent?
- The time period for which the money is borrowed
- The annual rate of interest agreed to be paid for the use of the principal amount (correct)
- The total amount borrowed by Mr. A
- The rate of return on the borrowed money
Who is considered the lender in the example given?
Who is considered the lender in the example given?
- Mr. B (correct)
- Mr. A
- Both Mr. A and Mr. B
- None of the above
What is the purpose of a 'Note' in the context of debt?
What is the purpose of a 'Note' in the context of debt?
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What is the time period expressed as in '3/12' years?
What is the time period expressed as in '3/12' years?
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