Professional Documents
Culture Documents
17. A dealer is quoting a $10,000 face 60 day T-Bill quoted at 3.22 bid, 3.14 ask. You
could buy this bill at _____ or sell it at _____.
A) $9,947.67 , $9,946.33
B) $9,678.00 , $9,686.00
C) $9,686.00 , $9,678.00
D) $9,946.33 , $9,947.67
E) None of the above
Answer: A Page: 131 Level: Medium
Rationale: Buy at 10,000[1-(0.031460/360)] ; Sell at 10,000 [1-(0.032260/360)]
24. A 90 day $1 million CD has a 4% annual rate quote. If you buy the CD, how much
will you collect in 90 days?
A) $1,040,000
B) $1,009,863
C) $1,000,000
D) $1,015,012
E) $1,010,000
Answer: E Page: 142 Level: Medium
Rationale: $1 mill [1 + (0.0490/360)
30. A U.S. exporter sells $50,000 of furniture to a Latin American importer. The exporter
requires the importer to obtain a letter of credit. When the bank accepts the draft the
exporter discounts the 90 day note at a 6% discount. What is the exporter's true
effective annual financing cost?
A) 6.00%
B) 6.18%
C) 6.32%
D) 6.24%
E) 6.45%
Answer: C Page: 125 Level: Difficult
Rationale: 50,000*[1-(0.06*90/360)] = 49,250; (50,000/49,250)365/90-1 =6.32%
31. A Chinese exporter sells $75,000 of toys to a French importer. The Chinese exporter
requires the French importer to obtain a letter of credit. When the bank accepts the
draft the exporter discounts the 60 day note at a 3.5% discount. What is the exporter's
true effective annual financing cost?
A) 3.62%
B) 3.57%
C) 3.35%
D) 3.78%
E) 3.97%
Answer: A Page: 125 Level: Difficult
Rationale: 75,000*[1-(0.035*60/360)] = 74,562.5; (75,000/74,562.5)365/60-1 =3.62%
32. If a $10,000 par T-Bill has a 4.5% discount quote and a 180 day maturity, what is the
price of the T-Bill?
A) $9,550
B) $9,525
C) $9,775
D) $9,675
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