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A company is planning to issue BABs next month for which their bank charges an acceptance fee of 110 basis points. They hedge their exposure
A company is planning to issue BABs next month for which their bank charges an acceptance fee of 110 basis points. They hedge their exposure using BAB futures at a price of 94.50. It turns out the 90-day rate at the time of issue is 5.65%. The companys cost of funds is: A. 5.50% B. 5.65% C. 6.60% D. 6.75%. E. None of these.
A company is planning to issue BABs next month for which their bank charges an acceptance fee of 110 basis points. They hedge their exposure using BAB futures at a price of 94.50. It turns out the 90-day rate at the time of issue is 5.65%. The companys cost of funds is:
A. 5.50%
B. 5.65%
C. 6.60%
D. 6.75%.
E. None of these.
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School Finance And Business Management Optimizing Fiscal Facility And Human Resources
Authors: Craig A. Schilling, Daniel R. Tomal
2nd Edition
1475844026, 978-1475844023
