Jennifer has an idea for starting a new business.Although she is only a high school graduate,she is certain the business will succeed because she can target high school and college graduates and then the general public.Her idea is for an employment agency that focuses on individuals with excellent computer and writing skills that will work for companies writing blog and web-page materials from home.She knows several individuals she can approach for employment and has several classmates in mind for their employees.She puts together a business plan,researches office locations,existing employment agency procedures and hiring practices,and forms of business.She meets with a banker and asks about financing for the start-up and is turned down.The banker suggests she seek crowdfunding.Knowing crowdfunding will not generate the funds she will need,she approaches her parents and asks for a loan.Her parents agree to loan her $10,000,but require her to sign a written pledge to repay the $10,000 plus interest in one year.What was the written pledge she signed?
A) Trade credit
B) Promissory note
C) Unsecured bank loan
D) Commercial paper

Question

Quizplus · Accepted Answer

The written pledge that Jennifer signed is a Promissory note, which is a legally binding document that outlines the terms of a loan, including the amount borrowed, the interest rate, and the repayment schedule. By signing the promissory note, Jennifer promises to repay the $10,000 loan plus interest within one year as agreed upon with her parents.

Jennifer Has an Idea for Starting a New Business