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Match the Following Terms with the Descriptions Below

Question 66

Matching

Match the following terms with the descriptions below.

Premises:

Responses:

The cash raised by issuing a note.

Lump-sum payment note

The amount the borrower will repay the lender for principal.

Holder of the note

A note with periodic payments based on a face rate and a promise to pay a final lump-sum at the maturity date.

Face rate on the note

When the present value or cash proceeds of a note exceeds the face value of the note.

Face value of the note

A long-term note secured with real estate.

Maker of the note

Also known as a noninterest bearing note.

Market, or, effective interest rate

The interest rate used to determine the cash interest paid by the note.

Carrying value of debt

The liability of a note at a specified time.

Periodic payment note

A lender

Mortgage

Also known as an installment note.

Discount on a note

The excess of the face value over the proceeds of the note.

Collateral

The assets named in the debt agreement that the lender can have if the borrower fails to comply with the terms of the note.

Proceeds of the note

The actual interest rate charge on the proceeds of a note.

Periodic payment and lump-sum note

The borrower who signs the note.

Premium on a note

Premises:

The cash raised by issuing a note.

The amount the borrower will repay the lender for principal.

A note with periodic payments based on a face rate and a promise to pay a final lump-sum at the maturity date.

When the present value or cash proceeds of a note exceeds the face value of the note.

A long-term note secured with real estate.

Also known as a noninterest bearing note.

The interest rate used to determine the cash interest paid by the note.

The liability of a note at a specified time.

A lender

Also known as an installment note.

The excess of the face value over the proceeds of the note.

The assets named in the debt agreement that the lender can have if the borrower fails to comply with the terms of the note.

The actual interest rate charge on the proceeds of a note.

The borrower who signs the note.

Responses:

Lump-sum payment note

Holder of the note

Face rate on the note

Face value of the note

Maker of the note

Market, or, effective interest rate

Carrying value of debt

Periodic payment note

Mortgage

Discount on a note

Collateral

Proceeds of the note

Periodic payment and lump-sum note

Premium on a note

Correct Answer:

Premises:

Responses:

The cash raised by issuing a note.

The amount the borrower will repay the lender for principal.

A note with periodic payments based on a face rate and a promise to pay a final lump-sum at the maturity date.

When the present value or cash proceeds of a note exceeds the face value of the note.

A long-term note secured with real estate.

Also known as a noninterest bearing note.

The interest rate used to determine the cash interest paid by the note.

The liability of a note at a specified time.

A lender

Also known as an installment note.

The excess of the face value over the proceeds of the note.

The assets named in the debt agreement that the lender can have if the borrower fails to comply with the terms of the note.

The actual interest rate charge on the proceeds of a note.

The borrower who signs the note.