Ignoring Transaction Costs, the Cost of Borrowing with Commercial Paper

question 41

Multiple Choice

Ignoring transaction costs, the cost of borrowing with commercial paper is equal to

• A)the yield on T-bills of the same maturity.
• B)the yield earned by investors holding the paper until maturity.
• C)the federal funds rate.
• D)the par value of the paper.

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Definitions:

Novel Functions

Innovative or new roles that objects or ideas can fulfill beyond their original purposes.

Species Diversity

A measurement of the variety of species within a biological community, reflecting both the number of different species and their relative abundance.

Natural Selection

A process in evolutionary biology where organisms better adapted to their environment tend to survive and produce more offspring.

Structural Traits

The inherent characteristics or features that define the makeup or composition of an entity or organism.