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A credit market instrument that requires the borrower to make the same payment everyperiod until the maturity date is known as aA) simple loan.B) fixed-payment loan.C) coupon bond.D) discount bond

Question

A credit market instrument that requires the borrower to make the same payment everyperiod until the maturity date is known as aA) simple loan.B) fixed-payment loan.C) coupon bond.D) discount bond

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Solution

The correct answer is B) fixed-payment loan. This type of loan requires the borrower to make the same payment every period until the maturity date. The payment usually includes both principal and interest.

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