A financial guarantee ensure that the lander will be paid ____________?
Correct answer: A. principle and interest
- A. principle and interest
- B. debt and cash
- C. capital and profit
- D. cash and interest
Explanation
A financial guarantee protects the lender by ensuring payment of both the principal amount borrowed and the interest due. “Principle” in the option is a spelling error for principal.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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