Question: On April 3 1 , 2 0 2 4 , Elkhorn Associates borrowed $ 1 0 million cash from Colonial Bank and issued a 5

On April 31,2024, Elkhorn Associates borrowed $10 million cash from Colonial Bank and issued a 5-month, noninterest-bearing note, priced to yield an effective
interest rate of 10%. The stated discount rate on this loan is:
Multiple Choice
Equal to the effective interest rate.
More than the effective interest rate.
Less than the effective interest rate.
Unrelated to the effective interest rate.
On April 31,2024, Elkhorn Associates borrowed $10 million cash from Colonial

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