Firms typically borrow from banks, insurance companies, and other financial institutions by signing a note, which specifies the terms of the borrowing arrangement. The initial valuation of the loan equals _____.

	A.	the present value of the future cash payments discounted at the yield required by the lender (i.e., the market rate).
	B.	the present value of the future cash payments discounted at the yield required by the borrower (i.e., the coupon rate).
	C.	the future value of the present cash payments discounted at the yield required by the borrower (i.e., the coupon rate).
	D.	the future value of the present cash payments discounted at the yield required by the lender (i.e., the market rate).
	E.	the future value of the present cash payments undiscounted.