A and B both occur with about equal frequency

Question 11 pts

At any given time, the yield on commercial paper is ____ the yield on a T-bill with the same maturity.

[removed] a. slightly less than
[removed] b. slightly higher than

 

[removed] c. equal to
[removed] d. A and B both occur with about equal frequency

 

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Question 21 pts

When firms sell commercial paper at a ____ price than they projected, their cost of raising funds is ____ than projected.

[removed] a. higher; higher
[removed] b. lower; lower

 

[removed] c. A and B
[removed] d. none of the above

 

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Question 31 pts

An investor purchased an NCD a year ago in the secondary market for $980,000. He redeems it today and receives $1,000,000. He also receives interest of $30,000. The investor’s annualized yield on this investment is

[removed] 2.0 percent.
[removed] 5.10 percent.

 

[removed] 5.00 percent.
[removed] 2.04 percent.

 

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Question 41 pts

Which money market transaction is most likely to represent a loan from one commercial bank to another?

[removed] banker’s acceptance
[removed] negotiable CD

 

[removed] federal funds
[removed] commercial paper

 

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Question 51 pts

The yield on NCDs is ____ the yield of Treasury bills of the same maturity. The difference between their yields would be especially large during a ____ period.

[removed] greater than; recessionary
[removed] greater than; boom economy

 

[removed] less than; boom economy
[removed] less than; recessionary

 

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Question 61 pts

Bullock Corp. purchases certain securities for $4,921,349, with an agreement to sell them back at a price of $4,950,000 at the end of a 30-day period. The repo rate is ____ percent.

[removed] 7.08
[removed] 6.95

 

[removed] 6.99
[removed] 7.04

 

[removed] none of the above

 

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Question 71 pts

A ____ is not a money market security.

[removed] Treasury bill
[removed] negotiable certificate of deposit

 

[removed] bond
[removed] banker’s acceptance

 

[removed] All of the above are money market securities.

 

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Question 81 pts

Freeman Corp., a large corporation, plans to issue 45-day commercial paper with a par value of $3,000,000. Freeman expects to sell the commercial paper for $2,947,000. Freeman’s annualized cost of borrowing is estimated to be ____ percent.

[removed] 14.39
[removed] 14.13

 

[removed] 14.59
[removed] 14.33

 

[removed] none of the above

 

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Question 91 pts

Large corporations typically make ____ bids for T-bills so they can purchase larger amounts.

[removed] competitive
[removed] noncompetitive

 

[removed] very small
[removed] none of the above

 

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Question 101 pts

Money markets are used to facilitate the transfer of short-term funds from individuals, corporations, or governments with excess funds to those with deficient funds.

[removed] True
[removed] False