PLEASE ANSWER ALL QUESTIONS FOR THUMBS UP 1) An individual desires to earn a real return of 1 Prices are expected to rise over the investment period by 4 The investor has a federal tax rate of 25 and state and local tax rate of 6 , what is the investor's expected after tax rate of return a 4 14 b 4 62 c 5 08 d 3 45 2) What is the duration of a three year, $1,000 Treasury note with a 12 semiannual coupon selling with a yield to maturity of 8 a 2 56 b 2 48 c 2 77 d 2 63 3) On September 9, 2016, the Wall Street Journal reported that the overnight federal funds rate was 0 42 What is the bond equivalent rate for federal funds a 2 28 b 4 26 c 0 43 d 2 79 4) Bank A has an increase in deposits of $25 million dollars and all bank reserve requirements are 10 Bank A loans out the full amount of the deposit increase that is allowed This amount winds up deposited in Bank B Bank B lends out the full amount possible as well and this amount winds up deposited in Bank C What is the total increase in deposits resulting from these three banks a $75 million b $54 20 million c $70 million d $67 75 million 5) A semi annual coupon bond has a 5 required return Interest rates are projected to decrease 50 basis points The bond's duration is 6 years What is the predicted price change a 2 93 b 4 72 c 2 93 d 4 72 6) A bank has $790 million in checkable deposits The bank has $100 million in reserves The reserve requirement is 10 of checkable deposits The banks required reserves are and its excess reserves are a $110 million $0 b $21 million $80 million c $89 million $21 million d $79 million $21 million 7) The U S Treasury website reports the current one year T bill rate is 0 57 and the current two year T note rate is 0 78 If the unbiased expectations theory of the term structure of interest rates holds, what is the one year interest rate expected one year from now a 0 99 b 0 65 c 13 51 d 12 04 8) Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $24,950,000, with the promise to buy them back at a price of $25,000,000 after 21 days What is the yield on the repo a 14 18 b 5 72 c 3 44 d 10 31

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PLEASE ANSWER ALL QUESTIONS FOR THUMBS UP 1) An individual desires to earn a real return of 1%. Prices are expected to rise over the

PLEASE ANSWER ALL QUESTIONS FOR THUMBS UP

1) An individual desires to earn a real return of 1%. Prices are expected to rise over the investment period by 4%. The investor has a federal tax rate of 25% and state and local tax rate of 6%, what is the investor's expected after tax rate of return?

	a.	4.14%
	b.	4.62%
	c.	5.08%
	d.	3.45%

What is the duration of a three-year, $1,000 Treasury note with a 12% semiannual coupon selling with a yield to maturity of 8%?

	a.	2.56
	b.	2.48
	c.	2.77
	d.	2.63

On September 9, 2016, the Wall Street Journal reported that the overnight federal funds rate was 0.42%. What is the bond equivalent rate for federal funds?

	a.	2.28%
	b.	4.26%
	c.	0.43%
	d.	2.79%

Bank A has an increase in deposits of $25 million dollars and all bank reserve requirements are 10%. Bank A loans out the full amount of the deposit increase that is allowed. This amount winds up deposited in Bank B. Bank B lends out the full amount possible as well and this amount winds up deposited in Bank C. What is the total increase in deposits resulting from these three banks?

	a.	$75 million
	b.	$54.20 million
	c.	$70 million
	d.	$67.75 million

A semi-annual coupon bond has a 5% required return. Interest rates are projected to decrease 50 basis points. The bond's duration is 6 years. What is the predicted price change?

	a.	2.93%
	b.	4.72%
	c.	-2.93%
	d.	-4.72%

6) A bank has $790 million in checkable deposits. The bank has $100 million in reserves. The reserve requirement is 10% of checkable deposits. The banks required reserves are _____ and its excess reserves are _____.

	a.	$110 million; $0
	b.	$21 million; $80 million
	c.	$89 million; $21 million
	d.	$79 million; $21 million

The U.S Treasury website reports the current one-year T-bill rate is 0.57% and the current two-year T-note rate is 0.78%. If the unbiased expectations theory of the term structure of interest rates holds, what is the one-year interest rate expected one year from now?

	a.	0.99%
	b.	0.65%
	c.	13.51%
	d.	12.04%

8) Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $24,950,000, with the promise to buy them back at a price of $25,000,000 after 21 days. What is the yield on the repo?