A Corporation Is Planning to Issue $10 Million Worth of 180-Day

question 92

Multiple Choice

A corporation is planning to issue $10 million worth of 180-day commercial paper.In order to reduce the interest rates by 25 basis points (per year) , it plans to back this issue with a standby letter of credit or a loan commitment.The standby letter of credit is available for 20 basis points (per year) to be paid up-front.The loan commitment for $10 million is available for an up-front fee of 15 basis points (per year) and a 5 basis points back-end fee. What are the savings to the corporation if it obtains a standby letter of credit to back its $10 million issue of commercial paper?

• A)$1,250.
• B)$2,500.
• C)$3,750.
• D)$5,000.
• E)$6,250.

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Definitions:

Inclusive Design

A design methodology that aims to make products, services, and environments accessible to as many people as possible, taking into account a wide range of human diversity, including age, gender, physical abilities, and cultural backgrounds.

Vision Impairments

A range of conditions that affect vision, where eyesight cannot be corrected to a normal level with glasses or contact lenses.

Screen Readers

Software applications that translate text displayed on a screen into speech or braille, assisting users who are visually impaired.

Closed Captioning

Text displayed on a television or video screen to provide a transcript of the audio portion, primarily for the deaf or hard-of-hearing audience.