QUESTION 18

In

investing the surplus cash, the treasurer at Madiba Ltd bought commercial paper

at R300,000 with a face value of R310,000, a maturity of 100 days, and

brokerage fees and other charges of 4%.

The yield

of the commercial paper is … if the company holds the commercial paper until

maturity.

a.    18.05%

b.    22.11%

c.     26.12%

d.    28.42%