difference between the discount rate (DR) and the add-on rate (AOR) for money market instruments, and provides the correct formulas for each?A. The DR is based on the price at issuance, while the AOR is based on the face value at maturity. The formulas are DR=(Year/Days)×(FV−PV)/PVAOR=(Year/Days)×(FV−PV)/FVB. The DR is applied to instruments like commercial paper and Treasury bills, while the add-on rate is applied to instruments like bank certificates of deposit and repos. The formulas areDR=(Year/Days)×(FV−PV)/FVAOR=(Year/Days)×(FV−PV)/PVC. The DR is typically quoted as the face value at maturity, while the add-on rate is typically quoted as the price at issuance. The formulas are DR=(Year/Days)×(FV−PV)/FVAOR=(Year/Days)×(FV−PV)/PV

Then try StudyFetch, the AI-powered platform that can answer your questions and teach you more about it!