Question 1 (a) (i) What are the main purposes of money markets?' Discuss. (8 marks) There is no need for money markets because we have the banking industry to provide short-term loans and to accept short-term deposits.' Comment on this statement. (6 marks) (b) Pinnacle Bhd is a small-scale family business that supplies plastic product for commercial use. It was established two years ago whose current revenue is about RM1 million a year. Recently, Pinnacle intends to raise funds for an expansion project that requires initial investment of RM100,000 to develop a new production line. The borrowed fund will be fully repaid only after the production line is up and running after 1 year. The Managing Director, Mrs. Chew, is thinking of issuing commercial paper because the prevailing commercial paper market rate is lower than the interest rates charged by other banking facilities. Required: Assess the suitability of using commercial paper to fund the working capital need of Pinnacle Bhd. (7 marks) (c) A 270-day Treasury bill that pays RM10,000 at maturity is currently priced at RM9,360. Compute its annualized discount rate and the annualized investment rate. (4 marks) [Total: 25 Marks]