# Quiz 6 Fin 385 – collegepaperslab.com | Instant Assignment Help

Quiz 6 Fin 385 – collegepaperslab.com | Instant Assignment Help

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

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

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.

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

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

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

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.

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

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

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

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