AFP
CTP · Question #146
(Topic 2) Company X has a rating that is below investment grade. The treasurer would prefer to use commercial paper for its short-term financing needs and has a commitment from its bank to provide a…
The correct answer is A. Rating agency charges, credit enhancement costs, and dealer fees. See the full explanation below for the reasoning.
Question
- (Topic 2)
Company X has a rating that is below investment grade. The treasurer would prefer to use commercial paper for its short-term financing needs and has a commitment from its bank to provide a standby letter of credit. What costs would be associated with this process?
Options
- ARating agency charges, credit enhancement costs, and dealer fees
- BDiscount, broker fees, and commitment fees
- CDealer fees, compensating balances, and participation fees
- DCommissions, rating agency charges, and broker fees
How the community answered
(30 responses)- A83% (25)
- B10% (3)
- C7% (2)
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