A Bank Accepts 90 Day Bills with a Face Value

question 35

True/False

A bank accepts 90 day bills with a face value of $20 million for a fee of 120 bps.This bill is sold to an investor at a yield of 4% p.a.The amount received by the borrower is $19 804 666.30.

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Definitions:

Industries

Sectors of economy composed of businesses and organizations that share a common focus in producing or trading goods or services.

Seller's Lien

A legal claim or right a seller has on the property sold until the buyer completes payment, ensuring the seller can reclaim the property if the buyer defaults.

Unpaid

The state of not having been paid for goods provided, services rendered, or work done.

Trade Practices Act

Legislation designed to regulate business conduct to ensure fair competition and protect consumers in certain jurisdictions.