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:

Complete Enumeration

A method involving listing all possible members of a set to show a proposition's truth.

Generalization

The process or act of formulating general concepts by abstracting common properties of instances.

Examination

A detailed inspection or analysis of an object, person, or situation for the purpose of evaluation.

Mammary Glands

Specialized organs in mammals, including humans, that produce milk to feed their young.