1) You would want to purchase a security if P ____________ PV or Err ____________ rrr

2) Which of the following are money market instruments?

A) Negotiable CDs

B) Common stock

C) T-bonds

D) 4 year maturity corporate bond

E) A, B and C are money market instruments

3) If a bond has an 8 percent coupon (annual payments) rate, a 4 year maturity, and similar bonds are selling for an 11 percent yield (YTM), what is the price of the bond?

1. $1,000.00
2. $880.22
3. $906.92
4. $910.35
5. $1,250.00

4) Depository institutions include:

A) Banks

B) Thrifts

C) Finance companies

D) All of the above

E) A and B only

5) The interest rate used to find fair present value of a financial security is the (

A) Expected rate of return

B) Required rate of return

C) Realized rate of return

D) Realized yield to maturity

E) Current yield