If a Company Sells (Discounts)a Bank Bill with a Face

question 36

Multiple Choice

If a company sells (discounts) a bank bill with a face value of $100 000,a term to maturity of 90 days,and a yield of 7.23% per annum,how much will the company raise on the issue? (Ignore transaction fees.)

• A) $84 869.90
• B) $98 248.49
• C) $98 269.99
• D) None of given answers.

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Definitions:

Average Revenue

The revenue per unit of output sold, calculated by dividing total revenue by the number of units sold.

Marginal Revenue

The additional revenue that is gained from selling one more unit of a good or service.

Purely Competitive Firm

An enterprise that operates in a perfectly competitive market, where it is a price taker due to the homogeneity of products and the presence of many buyers and sellers.

Market Price

The market rate at which an asset or service can currently be acquired or disposed of.