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Pembina Properties Issues Commercial Paper with a Face Value of $450,000

Question 105

Multiple Choice

Pembina Properties issues commercial paper with a face value of $450,000 and a maturity of three months.The firm receives $442,000 when it sells the paper.If the prime rate is 9% APR compounded quarterly,how much interest savings did Pembina realize by using commercial paper?


A) $1,945
B) $9,945
C) $8,000
D) $31,780
E) $1,625

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