1. From the standpoint of a borrower, is long-term or short-term credit riskier? Explain.
2. What are two principal reasons for holding cash?
3.
a. What is the definition of commercial paper?
b. Go to www.federalreserve.gov/econresdata/releases/statisticsdata.htm and find the total amount of commercial paper outstanding for the latest month available. Print the page.
4. What is the difference between Annual Percentage Rate and Effective Annual Rate?
5. Explain the meaning for credit terms of 1/5, net 20.