ICMA Exam FMFQ Topic 4 Question 45 Discussion

Actual exam question for ICMA's FMFQ exam

Question #: 45
Topic #: 4

[All FMFQ Questions]

You have just bought a USD 5,000,000 of a 3 month Commercial paper (91 days) qupted at a discount to yield of 4.5% (A/360). How much will you pay for this security?

AFace value

BMore than face value

CLess than face value

DNeed more information

Show Suggested Answer

Suggested Answer: C

by Chantell at Oct 17, 2023, 05:56 PM

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Santos

5 days ago

Okay, let's think this through step-by-step. We have a $5,000,000 commercial paper with a 91-day maturity and a 4.5% discount yield. To find the price, we'll need to use the discount formula.

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Nickie

5 days ago

I think this could be a compound instrument because it has both debt and equity features—like the practice question we did on convertible bonds!

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Gussie

10 days ago

This seems like a tricky one. I'd want to make sure the teams are taking responsibility for coordinating their work, so I'd lean towards option B.

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Rosina

15 days ago

This looks like a straightforward question on insurance company investment regulations. I think I can apply the concepts we covered in class to determine the correct answer.

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