Please answer these four multiple choice questions: 1. If the price of a 1-year Treasury Bill is $95.00. compute the interest rate from the price using the PV formula: a. 5.12% b. 5.05% 4.96% d. 5.26% 2. If a 2-year bullet maturity bond with a fixed rate 3% coupon (semi annual pay) that is trading at a 101.00 premium price. what would you reasonably expect the yield-to maturity to be: a 3% b, 3% c. 3% d 0% 3. All else equal, a higher tax rate would affect the spread, or gap, between yields on taxable bonds vs. tax exempt bonds in the following way: a. Narrow the spread b. Widen the spread c. Not affect the spread d. None of the above 4. Financial intermediaries perform 5 main functions, they are: a. Pool savings, safekeeping & accounting, provide liquidity, diversify risk and process equity transactions b Pool savings, safekeeping & accounting, provide leverage, diversity risk and process information c Pool savings, safekeeping & accounting, provide liquidity, diversify risk and collect & process information services d. Pool savings. safekeeping of precious metals, provide liquidity, diversity risk and collect & process information

services