Reference no: EM133116206
1) A banker's acceptance with a face value of $20,000 and 263 days to maturity has a discount yield of 3.83 percent. What is the current price of the security?
The answer should be formatted as a number with 2 decimal places (e.g. 99.99)
2) Your credit card has an annual percentage rate of 22.43 percent and compounds interest daily (use a 360 day year). What is the effective annual rate?
Answer should be formatted as a percent with 2 decimal places (e.g. 99.99).
3) A credit card charges a daily rate of 0.04 percent compounded daily (360 day year). What is the APR for the credit card?
Answer should be formatted as a percent with 2 decimal places (e.g. 99.99).
4) A treasury bill with a face value of 1,000,000 is has 298 days to maturity and is currently selling for $958,983.84. What is the discount yield on the stated treasury bill?
Answer should be formatted as a percent with 2 decimal places (e.g. 99.99).
5) The yield curve is normally upward sloping because: Multiple Choice
A) longer maturities are riskier than shorter maturities
B) shorter maturities are riskier than longer maturities
C) investors prefer bonds over stocks
D) investors are not risk-averse
E) markets are inefficient
6) To borrow reserves from the Federal Reserve, a bank must pay which rate? Multiple Choice
A) discount
B) Fed funds
C) financial overnight
D) daily
E) institutional
7) Which one of the following best describes a real interest rate? Multiple Choice
A) current rate on a U.S. Treasury bill
B) nominal rate minus the risk-premium on an individual security
C) market return minus the risk-free rate
D) nominal rate minus inflation
E) historical rate rather than a projected rate
8) Which one of the following is the interest rate that the largest commercial banks charge their most creditworthy corporate customers for short-term loans? Mulitple Choice
A)discount
B) prime
C) Federal funds
D) bid
E) call money
9) Which one of the following rates is used by brokerage firms as the basis for determining margin loan rates? Multiple Choice
A) discount
B) Fed funds
C) prime
D) brokerage
E) call money
10) The bank discount yield is computed based on _____ year. Multiple Choice
A) a 365 day
B) either a 360 or a 365 day
C) a 360 day
D) a 365 or a 366 day
E) a 366 day