A corporate treasurer is looking to invest about $4 million for 60 days. Commercial paper rates are a 3.65 percent discount and CD rates are 3.66 percent. Comparing the bond equivalent yields over a 365-day year,which is the best alternative? What is the opportunity cost of leaving the funds idle? (Watch your rounding.)

Question

Quizplus · Accepted Answer

The Answer of A corporate treasurer is looking to invest about $4 million for 60 days. Commercial paper rates are a 3.65 percent discount and CD rates are 3.66 percent. Comparing the bond equivalent yields over a 365-day year,which is the best alternative? What is the opportunity cost of leaving the funds idle? (Watch your rounding.)

A Corporate Treasurer Is Looking to Invest About $4 Million