You are considering purchasing a $2,000,000, 200-day issue of commercial paper with a 4% discount yield. Calculate the effective yield, assuming the security is purchased on the issue date and held to maturity:

• A. 3.33%
• B. 4.12%
• C. 4.19%
• D. 4.23%

You are considering purchasing a $2,000,000, 200-day issue of commercial paper with a 4% discount yield. Calculate the dollar amount of the discount.

• A. $40,000
• B. $43,836
• C. $44,444
• D. $45,555