single choice (each 2points, total 60 points Ha Treasury note has a bid price of
ID: 1163547 • Letter: S
Question
single choice (each 2points, total 60 points Ha Treasury note has a bid price of $975, the quoted bid price in the Wall Street Journal would 1. If be A. 97:50. C. 97:80 D. 94:24 E. 97:75. B. 97:16. A 5.5% 20-year municipal bond is currently priced to yield 7.2%. For a taxpayer in the 33% rginal tax bracket, this bond would offer an equivalent taxable yield of: A. 8.20%. B. 10.75%. C. 11.40. D. 4.82%. E. none of the above. 3. The stocks on the Dow Jones Industrial Average A. have remained unchanged since the creation of the index. B. include most of the stocks traded on the NYSE C. are changed occasionally as circumstances dictate. D. consist of stocks on which the investor cannot lose money E. B and C 4. Which of the following securities is a money market instrument? A. Treasury note D. commercial paper. 5. A put option allows the holder to A. buy the underlying asset at the strike price on or before the expiration date. B. sell the underlying asset at the C. sell the option in the open market prior to expiration. D, B and C. E. A and C 6. Of the following types of mutual funds, an investor that wish portfolio of stocks worldwide (including the U.S.) should choose B. Treasury bond. C. municipal bond. E. mortgage security. strike price on or before the expiration date. es to invest in a diversified B. global funds. E. none of the above. A. international funds. C. regional funds. D. emerging market funds. 7. An example of a derivative security is B. a call option on Mobil stock E. A and B A. a common share of General Motors D, B and C C a commodity futures contract 8. An ETFExplanation / Answer
1. B- 97:16
Since treasuries are quoted as a percent of $1,000 and in 1/32s.
2. B- 10.75%
0.072 = rm (1-t)
0.072 = rm / (0.67)
rm = 0.1075 x 100 = 10.75%
3. C. are changed occasionally as circumstances dictate.
4. D. commercial paper.
Since money market instruments are short term securities having maturities ranging from 1 day to 1 year and are very much liquid. Treasury bills, federal agency notes, certificates of deposit (CDs), Eurodollar deposits, commercial paper, bankers' acceptances are some of the examples of such securities.
5. D. B and C
Since a put option gives you the right to sell an underlying asset at a certain fixed price within a specified time frame.
6. B. global funds.
Because international funds exclude the U.S. but global funds include the U.S.
7. D. B and C
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