Essay About Dealer Market And Ask Price Of A T-Bill

Finance 352 Practice Exam Solutions
The NYSE is an example of ________ and NASDAQ is an example of ______a dealer market; an auction marketa brokered market; a dealer marketa specialist; a brokered marketan auction market; a dealer marketThe money market is the market where:Only equity securities are traded.Debt securities with maturities of less than a year are traded.Where treasury debt securities are traded.Securities of maturities longer than one year are traded.The quote in the WSJ for the Treasury bill with face value of $1,000 is as follows: Time to Maturity (days)Bid YieldAsk Yield881.61%1.52%1161.62%1.53%1721.64%1.55%        Answer the following 4 questions using information in above table. The ask price of a T-bill in the secondary market is the price at which the investor can sell the bill.the price at which the dealer in T-bills is willing to buy the bill.less than the bid price of the T-bill.the price at which the investor can buy the T-billWhat are the purchase prices of the 116-day and 172-day bills that you face respectively?$995.07, $992.16$994.78, $992.16$995.07, $992.59$994.78, $992.59What would be the effective annual yields respectively for the 116- and 172-day bills if you hold them to maturity?1.57%, 1.59%1.54%, 1.57%1.59%, 1.57%1.57%, 1.54%What would be the effective annual yield on your investment if you buy the 172-day T-bill today and sell it back to a dealer after 84 days, assuming yields do not change over time?1.45%1.48%1.53%1.56%You purchased a share of stock for $50. Three year later you received $2 as dividend and sold the share for $49. What was your holding period return?2%2.5%-2%-2.5%8.        Regarding the previous question, what is the effective annual rate of your investment?        A. -6.7%        B. 0.67%        C.7.7%        D. -0.67%You purchased 100 shares of ABC common stock on margin at $70 per share. Assume the initial margin is 50% and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin.$27$50$60$8010. Which of the following is NOT a characteristic of preferred stock?It is like perpetuity.Gives voting rights to its owner.The firm retains discretion to make the dividend payments.Dividends are not tax-deductible for the firm as opposed to interest payments.        11.        __________ is NOT a characteristic of a money market instrument.