Amaar, Finance Manager in Al HOSN Investment Company, attended the meeting of the Board of Directors which discussed the possible investment opportunities. The company started its operations with an issued capital of OMR 850,000. The company is currently in the growth stage and showed sustained increase in its profitability. During the year, the company generated a total profit after tax of OMR 150,000. The total retained earnings of the company as on date stands OMR 600,000. At present, the following are few considerations which they can place their funds and the Board of Directors may investigate:

The stocks price for AL Jazeera Company is increasing dramatically of 1.75% on an average, per day,

Logistics business is doing good since there is high demand for new projects in Al Dhuqum industrial region and return is very promising.

The CBO has announced an upcoming issue of Government Treasury bill for six (6) months with 500,000 OMR par value for 496,500 OMR.

The Municipality plans to issue investment bonds in the next month.

Bank Muscat is offering good rate in deposits.

1- If the company would buy stocks, determine the component of financial system that would help them in the completing the transaction?

a.

Central Bank

b.

Financial Institutions

c.

Financial Instrument

d.

Financial Market

2- If the company would put funds in Logistics which principle of money and banking can be applied?

a.

Financial Market

b.

Central Bank

c.

Financial Instrument

d.

Financial Institutions

3- If the company would buy Municipal Bond, determine what component of financial system would the bond fall into?

a.

Financial Market

b.

Central Bank

c.

Financial Institutions

d.

Financial Instrument

4- If the company will buy T-bill and how much is the annualize T-bill discount?

a.

1.8%

b.

1.2%

c.

1.4%

d.

1.7%

5- If the company bought T-Bills will be sold 3 months (91 days) before maturity how much is the annualized yield?

a.

3.286%

b.

4.182%

c.

2.827 %

d.

2.198%