A commercial paper note with $1 million par value and maturing in 60 days has
an expected discount return (DR) at maturity of 6 percent. What was its purchase
price? What is this note’s expected coupon-equivalent (investment return) yield
What is the difference in basis points between the discount rate of return (DR)
and the investment rate of return (IR) on a $10 million commercial paper note
purchased at a price of $9.85 million and scheduled to mature in 25 days?
Commercial paper was purchased in the secondary market 30 days from maturity
at a bank discount yield of 9 percent. Ten days later, it was sold to a dealer at an
8 percent discount rate. What was the investor’s holding-period yield?
If Sterling Corporation purchases a $5 million bank CD that matures in 90 days
and promises an interest return of 6.25 percent, how much in total will Sterling
receive back when this CD matures?