Suppose IBM Decided to Issue Commercial Paper in Denominations of $5,000

question 92

Multiple Choice

Suppose IBM decided to issue commercial paper in denominations of $5,000 to raise a large sum of money. Since the commercial paper is secured only by IBM's reputation,

• A) IBM does not have to pay back the principal.
• B) IBM has to pay interest rates higher than those charged by commercial banks for short-term loans.
• C) no interest is paid.
• D) no collateral is involved.
• E) the commercial paper can be issued only in $1,500 or $10,000 denominations.

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Definitions:

Low-pass Filters

Electronic circuits that pass signals with a frequency lower than a certain cutoff frequency and attenuate signals with frequencies higher than the cutoff frequency.

Inductor

A passive electrical component used in circuits to store energy in a magnetic field when electric current flows through it.

Load Resistor

A resistor used within an electrical or electronic circuit to impose a specific load, often for testing, stabilizing, or controlling current flow.

Reject Low Frequencies

Describes a filter's ability to attenuate or eliminate signals below a certain frequency threshold, allowing higher frequencies to pass.