# Question

A financial manager may sell $1 million of six-month commercial paper for $950,000 or borrow $1 million for six months from a commercial bank for 10 percent annually and a 2 percent origination fee. Which set of terms is more expensive?

## Answer to relevant Questions

You purchase 100 shares for $50 a share ($5,000), and after a year the price rises to $60. What will be the percentage return on your investment if you bought the stock on margin and the margin requirement was (a) 25 ...You invest $1,000 in a certificate of deposit that matures after 10 years and pays 5 percent interest, which is compounded annually until the certificate matures. a. How much interest will you earn if the interest is left to ...Bank A offers the following terms for a $10 million loan: • Interest rate: 8 percent for one year on funds borrowed • Fees: 0.5 percent of the unused balance for the unused term of the loan Bank B offers the following ...What are the repayment schedules for each of the following five-year, 10 percent $10,000 term loans? a. equal annual payments that amortize (retire) the principal and pay the interest owed on the declining balance b. equal ...The price of a stock is $39, and a six-month call with a strike price of $35 sells for $8. a. What is the option's intrinsic value? b. What is the option's time premium? c. If the price of the stock rises, what happens to ...Post your question

0