1. Classify the following transactions as taking place in the primary or secondary markets: (LG 1-1) a. IBM issues $200 million of new common stock. b. The New Company issues $50 million of common stock in an IPO. c. IBM sells $5 million of GM preferred stock out of its marketable securities portfolio. d. The Magellan Fund buys $100 million of previously issued IBM bonds. e. Prudential Insurance Co. sells $10 million of GM common stock. 2. Classify the following financial instruments as money market securities or capital market securities: (LG 1-2) a. Banker's acceptances b. Commercial paper c. Common stock d. Corporate bonds e. Mortgages f. Negotiable certificates of deposit g. Repurchase agreements h. U.S. Treasury bills i. U.S. Treasury notes j. Federal funds 14. What is meant by maturity intermediation? (LG 1-6) 15. What is meant by denomination intermediation? (LG 1-6) 17. What types of risks do FIs face? (LG 1-7) 1. What is the discount yield, bond equivalent yield, and effective annual return on a $1 million Treasury bill that currently sells at 99.375 percent of its face value and is 65 days from maturity? (LG 5-2) 3. Calculate the bond equivalent yield and effective annual return on a negotiable CD that is 115 days from maturity and has a quoted nominal yield of 6.56 percent. (LG 5-2) 7. You can purchase a T-bill that is 95 days from maturity for $9,965. The Tbill has a face value of $10,000. (LG 5-2) a. Calculate the T-bill's quoted yield. b. Calculate the T-bill's bond equivalent yield. c. Calculate the T-bill's EAR. 14. Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $24,995,000, with the promise to buy them back at a price of $25,000,000. (LG 5-2) a. Calculate the yield on the repo if it has a 7-day maturity. b. Calculate the yield on the repo if it has a 21-day maturity. 15. Calculate the bond equivalent yields and the equivalent annual returns for the repurchase agreements described in Problem 14. (LG 5-2)