Your bank has agreed to grant you a discount loan with an APR of 5.25%. If you need $5,000 today, how large is the face value of the loan?
A) $4,751
B) $5,000
C) $5,263
D) $5,277
Answer: D
Explanation: D) To receive $5,000 the size of the discount loan must be net loan amount ÷ (1 - r)
= $5,000 ÷ (1 - .0525) = $5,277.
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Fill in the blank(s) with correct word
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Indicate whether the statement is true or false
Which of the following is a function of an integrated marketing communications system?
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Inca Company purchases a call option to hedge an investment of 20,000 shares of Limbaugh Company stock. The option agreement provides that if the prices of a share of Limbaugh Company stock is greater than $30 on October 25, Inca receives the difference (multiplied by 20,000 shares). Alternatively, if the price of the stock is less than $30, the option is worthless and will be allowed to expire
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