A Firm Would Like to Issue $15 Million Face Value

question 18

Multiple Choice

A firm would like to issue $15 million face value of 30-day bankers' acceptances quoted at 5.5% at a stamping fee of 0.25%.What is the effective annual cost to the firm?

• A) 4.65%
• B) 5.64%
• C) 8.90%
• D) 23.39%

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Definitions:

Amphetamine

A potent central nervous system stimulant used medicinally in the treatment of attention deficit hyperactivity disorder (ADHD), narcolepsy, and obesity, but also misused illegally for its energetic and euphoric effects.

Central Nervous System

The central nervous system consists of the brain and spinal cord, functioning as the primary processing center for the body's nervous system.

Stimulant

A substance that raises levels of physiological or nervous activity in the body, typically used to increase alertness, energy, or physical performance.

Tranquilizer

A drug used to reduce tension or anxiety, often by depressing nerve function.