Which of the following are typical commercial paper maturities? Check all that apply.

1 day

35 days

270 days

330 days

Which of the following are characteristics of commercial paper? Check all that apply.

Activity in their secondary market is low.

Common investors in these securities are households, firms, and financial institutions.

Their denominations are typically in multiples of $100,000.

They are typically used to finance a firms investment in inventory and accounts receivable.

Suppose Sean purchases a 45-day commercial paper with a par value of $1,000,000 for a price of $998,000. If Sean holds the commercial paper until maturity, and you assume a 360 day year, then the annualized yield is:

1.46%

1.57%

1.60%

1.71%