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AFP CTP Question # 248 Topic 25 Discussion

CTP Exam Topic 25 Question 248 Discussion:
Question #: 248
Topic #: 25

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?


A.

Rating agency charges, credit enhancement costs, and dealer fees


B.

Discount, broker fees, and commitment fees


C.

Dealer fees, compensating balances, and participation fees


D.

Commissions, rating agency charges, and broker fees


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