quiz 6 Fin 385

Question 11 pts

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

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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.

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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

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Question 41 pts

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

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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.

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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.

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Question 71 pts

A ____ is not a money market security.

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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.

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Question 91 pts

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

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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.