1. A borrower requires $1,000,000 today to pay for some inventory. A bank is prepared to provide the financing in the form of a 270-day bank accepted commercial bill at a yield of 3.95% p.a. How much would the company have to pay back in 270 days' time?

1. A commercial bill is an example of what is referred to as discount security. Explain what is meant with discount security and what are the markets into which it is issued? How does an investor make money on such securities? Identify 2 other discount securities in addition to commercial bills?