The duration of a promissory note is:
A) the period of time between its issue date and its maturity date.
B) the period of time between its issue date and the end of the calendar year.
C) the period of time between two consecutive interest payment dates of the note.
D) always fixed at one year.

Question

Quizplus · Accepted Answer

The duration of a promissory note is the period of time between its issue date and maturity date, which is when the borrower is expected to repay the loan in full. This time period can vary based on the terms of the note, but it is typically several months to a few years. Choice B is incorrect because there is no requirement that the note must end at the calendar year. Choice C is incorrect because this would refer to the interest payment frequency, not the overall duration of the note. Choice D is incorrect because promissory notes can have various durations depending on the agreement between the parties involved.

The Duration of a Promissory Note Is