A Company Has Directly Placed an Issue of Commercial Paper

question 10

Multiple Choice

A company has directly placed an issue of commercial paper that has a maturity of 90 days,with a face value of $100 000 yielding 8.25% per annum.What amount would the company raise on the issue?

• A) $83 096.19
• B) $91 750.00
• C) $97 965.75
• D) $98 006.31

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Definitions:

Bailout Package

Financial support provided, typically by a government, to prevent the bankruptcy of a failing business, industry, or financial system.

Treasury Department

A sector of government responsible for managing government revenue, producing currency, and implementing fiscal policy.

Federal Reserve System

The central banking system of the United States, responsible for nation's monetary policy by regulating the supply of money and interest rates.

National Security Archive

A non-profit organization that collects and publishes declassified documents obtained through the Freedom of Information Act, focusing on national security topics.