A Treasury bill matures in 81 days and has a bond equivalent yield of 2.79 percent. What is the effective annual rate? (Points : 1)
2.79 percent
2.82 percent
2.85 percent
2.88 percent
2.91 percent

2. Which one of the following is the interest rate that the largest commercial banks charge their most creditworthy corporate customers for short-term loans? (Points : 1)
discount
Federal funds
prime
bid
call money

3. The approximate nominal interest rate is computed as the real rate: (Points : 1)
minus the risk-free rate.
minus the inflation rate.
plus the risk-free rate.
plus the inflation rate.
divided by the inflation rate.

4. A Treasury bill matures in 73 days and has a bond equivalent yield of 4.18 percent. What is the effective annual rate? (Points : 1)
4.25 percent
4.47 percent
4.50 percent
4.54 percent
4.57 percent

5. A bond has a face value of $1,000 and a coupon rate of 5.5 percent. What is your annual interest payment if you own 8 of these bonds? (Points : 1)
$110
$220
$330
$440
$880

6. A 6.5 percent coupon bond has a face value of $1,000 and a current yield of 6.61 percent. What is the current market price? (Points : 1)
$983.36
$989.18
$1,011.82
$3,933.43
$4,067.47

7. Which one of the following is the correct definition of a coupon rate? (Points : 1)
semi-annual interest payment/par value
annual interest/par value
annual interest/market value
semi-annual coupon/bond price
annual coupon/bond price

8. The rate of return an investor actually earns from owning a bond is called which one of the following? (Points : 1)
market return
realized yield
annualized coupon yield
maturity yield
call yield

9. You are considering two bonds. Both have semi-annual, 8 percent coupons, $1,000 face values, and yields to maturity of 7.5 percent. Bond S matures in 4 years and Bond L matures in 8 years. What is the difference in the current prices of these bonds? (Points : 1)
$10.51
$11.33
$11.52
$12.67
$12.88

10. A bond has a par value of $1,000, a market price of $1,012, and a coupon rate of 5.75 percent. What is the current yield? (Points : 1)
5.68 percent
5.71 percent
5.75 percent
5.78 percent
5.80 percent