An advantage of promissory notes over some other forms of finance is that:
A)entities selling a promissory note incur a contingent liability and are marketable.
B)they are marketable.
C)entities selling a promissory note incur a contingent liability.
D)they can be long-term as well as short-term.

Question

Quizplus · Accepted Answer

The advantage of promissory notes over some other forms of finance is that they are marketable, meaning they can be sold on the open market. This provides flexibility for the issuer to obtain financing and for investors to liquidate their investment if needed. Choices A and C both mention the contingent liability aspect, which is a disadvantage of promissory notes. Choice D is not necessarily an advantage specific to promissory notes as other forms of finance can also be long-term or short-term.

An Advantage of Promissory Notes Over Some Other Forms of Finance