Amalgamated Appliance Inc

question 76

Multiple Choice

Amalgamated Appliance Inc.has planned a 3-month issue of commercial paper with a face value of $25,000,000.The paper is set to sell at 98.5% of face value.What is the 3-month interest rate?

• A)3.04%
• B)6.08%
• C)2.17%
• D)1.52%

---

Definitions:

Conditional Order

Refers to an order in a legal or financial context that will only be executed if certain conditions are met.

Negotiable Instrument

A financial document, such as a check or promissory note, that contains a promise to pay a specific amount of money to the bearer or assignee, which can be transferred by endorsement or delivery.

Promissory Note

A financial instrument containing a written promise by one party to pay a certain sum of money to another party under specified conditions.

Revolving Line of Credit

A flexible loan arrangement which allows a borrower to use, repay, and re-borrow funds up to a certain credit limit.