Final answer:
A non-interest-bearing note is a debt instrument that includes the interest in the face value of the note, being issued at a discount and repaid at the face value at maturity. The included interest is the difference between the purchase price and the face value. Thus, the correct option is "4".
Step-by-step explanation:
A non-interest-bearing note is a type of debt instrument that does not accrue interest over its life. When looking at options regarding such instruments, the correct answer is 4) A note that includes the interest in the face value of the note. Despite its name, a non-interest-bearing note effectively includes the interest, but it does so by being issued at a discount to its face value. On maturity, the face value is paid to the investor which includes the implied interest. The difference between the issue price (purchase price) and the face value represents the interest income to the investor.
Bonds, more generally, are debt securities with a face value, a coupon rate or interest rate, and a maturity date. The interest on a bond is often paid semi-annually, but it can be structured differently. A bond's present value can be calculated by considering its face value, interest rate, maturity date, and current market interest rates.