question archive TIC issues a 6-month commercial paper with a face value of QAR 105500
TIC issues a 6-month commercial paper with a face value of QAR 105500
Subject:FinancePrice:2.86 Bought5
TIC issues a 6-month commercial paper with a face value of QAR 105500. It will yield 0.85%. What is the selling price?
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Face value = QAR 105500
YTM = 0.85%
Period to maturity = 6 months i.e. 6x30 = 180 days
Selling price of commerical paper is:
= Face value / [(1+ YTM)x ( number of days to maturity/365)]
= 105500 /[1+0.0085)x(180/365)]
= 105500/0.49734246575
=QAR 212127.47
Hence price of the commercial paper is
QAR 212127.47
