An investor buys a T-bill at a bank discount quote of 5.40 with 90 days to maturity for 9,865.00.The bill has a face value of $10,000. The investor's bond equivalent yield on this investment is _____.

a. 5.47

b. 5.55

c. 5.40

d. 5.74

A bond issued by the state of Alabama is priced to yield 7.25%. If you are in the 24% tax bracket, this bond would provide you with an equivalent taxable yield of _________.

a. 5.51

b. 8.25

c. 9.54

d. None of the above

An investor puts up $18,000 but borrows an equal amount of money from his broker to double the amount invested to $36,000. The broker charges 8% on the loan. The stock was originally purchased at $30 per share, and in 1 year the investor sells the stock for $33. The investor's rate of return was ____.

a. 14 %

b. 6%

c. 2 %

d. 12%