The proceeds received from discounting a note could be less than the face value.

Name: The proceeds received from discounting a note could be less than the face value.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Discounting a note means selling it at a reduced price to a bank or other financial institution. The price is based on the length of time until the note matures and the perceived credit risk of the borrower. Therefore, the proceeds received from discounting a note could be less than the face value.

The Proceeds Received from Discounting a Note Could Be Less