Bidder. Bid Amount Price 1. $1,000. $0.9920 2. $877. $0.9960 3 $653 $0.9931 4 $978 $0.9970 5. $783. $0.9919 1. The Treasury Department wants to raise $2,650 by selling Treasury bills in an auction. The amount of non-competitive bids equals $703. What is the prevailing price in the auction in Table 1? A. $0.9920 B. $0.9960 C. $0.9931 D. $0.9970 E. $0.9919

2.Which competitive bidders were able to buy Treasury bills in Table 1? A. 4 B. 4, 2 C. 4, 2, 3 D. 4, 2, 3, 1 E. 4, 2, 3, 1, 5

3. Suppose Tom buys a call option contract with a strike of 3100.00%. The expiration price is $58. The premium is $5 per contract. What is the profit of the option per contract? A. 2700.00% B. -2700.00% C. 0.00% D. 2200.00%

4. If you pay $971 for a 91-day T-bill. It is worth $1,000 at maturity. What is the discount rate? A. 12.47% B. 11.98% C. 11.47% D. 11.82%

5. The price of a 270-day commercial paper is $7,551. If the annualized yield is 2.80%, what will the paper pay at maturity? A. $7,707 B. $7,762 C. $7,398 D. $7,345

6. Lauren has a margin account and deposits $50,265. Assume the margin requirement is 40.00% and Gentry Shoe Co. is selling at $32. What is the value of Laurens equity if the stock price falls to $26? A. $34,557 B. $20,106 C. $41,765 D. $26,703 Table 4 Stock. Share Price_t Price_t+1 A. 1,000. $45. $61 B 5,000 $24 $24 C 3,000. $15. $17 7. Based on Table 4 the three securities comprise an index. Calculate the market value weighted index for time period t+1? A. 110.48 B. 108.48 C. 121.43 D. 124.43 8. Based on Table 4, three securities comprise an index. Calculated the return for a price weighted index. A. 10.48% B. 21.43% C. 17.65% D. 18.65%

9. Rock Solid has a stock portfolio worth $100 million, which tracks closely with the S&P 500. The portfolio manager fears that a decline is coming therefore buys put options to protect the entire portfolio when the S&P 500 was $1,006. The strike price the manager entered into was at $1,006. Suppose after a year the S&P 500 is $954 and the portfolio is worth $91 million. The options premium is $1 million. What is the value of the total position? A. $92,067,594 B. $90,000,000 C. $96,168,986

10. You, Obama, and Jordan believe the current dividend and growth rate is $2 and 4%. However, you believe the discount rate is 14%, Obama believes it is 9%, Jordan believes it is 8%. What will be the prevailing price if only you three are the market participants? A. $31.58 B. $32.84 C. $41.60 D. $52.00

11. A portfolio manager has a $119 million dollar portfolio that tracks the S&P 500. Currently the S&P 500 is trading at $1,100. How will the manager hedge the portfolio using index options?? A. Buy 1082 put options contracts B. Sell 1082 put options contracts C. Sell 433 put options contracts D. Buy 433 put options contracts

12. The expected dividend is $2 for Stock A. The growth rate is 6%. The required rate of return is 12%. Based on the Dividend Discount Model what is the estimated price of Stock A? A. $33.33 B. $34.33 C. $34.33 D. $35.33

13. An investor acquires 101 shares of IBM at a price of $50 per share using 57% percent margin. If the price of the shares falls to $40, what is the stock return? A. -46.51% B. -35.09% C. -44.51% D. -20.00%

14. Which of the following strike prices for a call option has a higher premium? A. $7 B. $8 C. $9 D. $10 Shares Bid. Shares. Ask 1200. $44.00 700. $48.00 300. $40.00. 800. $43.00 800. $39.00. 400. $44.00 15. Table 5 shows the limit book for IBM stock. You place a market order to buy 200 shares. At what price will you buy the shares? A. $39.00 B. $43.00 C. $45.00 D. $48.00

16. Table 5 shows the limit book for IBM stock. You place a market order to buy 1,400 shares. At what price will you buy the shares (the cost basis)? A. $44.00 B. $43.50 C. $43.33 D. $43.00

Day. Beginning Balance. Deposits. Price. Gain Ending Balance 0 $0.00 $100.00 1. $98.70 2 $97.70 3 $102.10 17. The number of contracts is 10, the initial margin is $8, and the maintenance margin is $6. What is maximum ending balance at which a margin call will occur? A. $80.00 B. $20.00 C. $23.00 D. $60.00 18. Use Table 6. What is the ending balance on day 3? Initial margin is $8, maintenance margin is $6, and investor is long 10 contracts. A. $111.00 B. $124.00 C. $161.00 D. $104.00

19. Use comparables to estimate the stock price for High Tech. Table 7 displays the comparable valuation ratios and the financial data for High Tech. A. $93.96 B. $63.43 C. $56.96 D. $44.00

20. Use Table 7. Assume company 1 and company 3 are in the tech sector and company 2 is in the consumer staples sector. Value High Tech based on the comparables approach with this new information. A. $36.10. B. $56.15 C. $56.96 D. $46.50

Company 1. Company 2. Company 3 P/E. 19.30. 20.80 16.80 P/BV 7.8 8.2 7 P/S 3 2.6 3.2

High Tech EPS 2.00 BV per share 11.60 Sales per share. 15.00