A Firm Has Directly Placed an Issue of Commercial Paper

question 156

Multiple Choice

A firm has directly placed an issue of commercial paper that has a maturity of 60 days. The issue sold for $980,000 and has an annual interest rate of 12.24 percent. The value of the commercial paper at maturity is ________ (assume 360 days in a year) .

• A) $19,992
• B) $980,000
• C) $1,000,000
• D) $960,008

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