What Is the Maturity Value of a 3-Month,12% Note for $20,000

question 105

Multiple Choice

What is the maturity value of a 3-month,12% note for $20,000?

• A) $20,000
• B) $22,400
• C) $21,200
• D) $20,600

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Definitions:

Direct Quote

In foreign exchange, a price quote that specifies the domestic currency price of one unit of foreign currency.

Indirect Quote

A currency quotation in the foreign exchange markets that expresses the amount of foreign currency required to buy or sell one unit of the domestic currency.

Forward Rate

The agreed-upon price for a financial transaction that will occur at a future date, as in currency or interest rate swaps.

Spot Rate

The current exchange rate at which a currency can be bought or sold for immediate delivery.