A Firm Issues Two-Month Commercial Paper with $1,000,000 Face Value

question 74

Multiple Choice

A firm issues two-month commercial paper with $1,000,000 face value and receives $985,000. What is the EAR the firm is paying for these funds?

• A) 1.52%
• B) 7.50%
• C) 9.49%
• D) 15.00%

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Definitions:

Equal Right

The principle that all individuals are entitled to the same rights and treatment under the law.

Individual Partner

A single member in a partnership arrangement who contributes resources, expertise, or labor in exchange for a share of the profits.

Third Party

An individual or group besides the two parties primarily involved in a transaction or agreement.

Partnership Matter

Refers to any legal, financial, or operational issue or activity that involves or affects a business partnership.