LOG needs to borrow $700,000 for 90 days to fund the purchase of new stock. To do this, the company decides to issue Promissory Notes (P-notes).

Explain what a Promissory Note is including in your response:

• what discount securities are and why they are tradeable;
• what a P-note is and how a P-note differs from a Bill of Exchange
• what a credit rating is and why this is important for Logica when issuing P-notes