Answered: A promissory note with a face value of…

A promissory note with a face value of P500 000 has 45 days until maturity. If the relevant yield is 7% then what is the current price of this promissory note

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

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A promissory note with a face value of P500 000 has 45 days until maturity. If
the relevant yield is 7% then what is the current price of this promissory note

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