On june 1, 2010, nott corp. loaned horn $400,000 on a 12% note, payable in five annual installments of $80,000 beginning january 2, 2011. in connection with this loan, horn was required to deposit $5,000 in a noninterest-bearing escrow account. the amount held in escrow is to be returned to horn after all principal and interest payments have been made. interest on the note is payable on the first day of each month beginning july 1, 2010. horn made timely payments through november 1, 2010. on january 2, 2011, nott received payment of the first principal installment plus all interest due. at december 31, 2010, nott's interest receivable on the loan to horn should bea. $0.b. $4,000.c. $8,000.d. $12,000.

Financial markets and channel to . they also channel money from individuals who want to for the future to those who need cash to spend today. a third function of financial markets is to allow individuals and businesses to adjust their risk. for example, , such as the vanguard index fund, and , such as spdr's or “spiders,” allow individuals to spread their risk across a large number of stocks. financial markets provide other mechanisms for sharing risks. for example, a wheat farmer and a baker may use the to reduce their exposure to wheat prices. financial markets and intermediaries allow investors to turn an investment into cash when needed. for example, the of public companies are because they are traded in huge volumes on the . are the main providers of payment services by offering checking accounts and electronic transfers. finally, financial markets provide information. for example, the of a company that is contemplating an issue of debt can look at the yields on existing to gauge how much interest the company will need to pay.