(I)A simple loan requires the borrower to repay the principal at the maturity date along with an interest payment.
(II)A discount bond is bought at a price below its face value,and the face value is repaid at the maturity date.
A) (I) is true, (II) false.
B) (I) is false, (II) true.
C) Both are true.
D) Both are false.

Question

Quizplus · Accepted Answer

Both statements are true. Statement (I) describes a simple interest loan where the borrower repays both the principal and interest at the maturity date. Statement (II) describes a discount bond where the bond is purchased at a price below its face value and the face value is repaid at maturity.

(I)A Simple Loan Requires the Borrower to Repay the Principal