North Carolina Building Contractor License Practice Exam

What type of note typically lasts for six months?

1. Promissory note

2. Savings bond

3. Securities note

4. Six month note

The correct answer is: Six month note

A six-month note is specifically designed with a duration of six months, making it the most direct and accurate answer to this question. The term outlines its maturity time frame clearly, indicating that it is a short-term financial instrument. In financial contexts, such as loans or bonds, a six-month note is utilized mainly for short-term borrowing or investment. Its purpose is to allow businesses or individuals to obtain capital or liquidity quickly, which can be paid back or matured after the specified period. In contrast, while a promissory note can have various terms, including six months, it is not confined to that duration and can be set for different lengths depending on the agreement between parties. A savings bond typically has a longer maturity period and is more suited for long-term investment, while a securities note, like other notes, may not adhere to a six-month term specifically. Thus, the defining characteristic of a six-month note is its duration, making it the correct answer in this scenario.