Question 1

On what type of basis are promissory notes issued?

a) Yield basis

b) Discount-yield basis

c) Discount basis

d) Yield-Discount basis

Question 2

Yield instruments pay the interest and the amount invested at_____?

a) Initiation of the instrument

b) The end of the life of the instrument on condition that the investor reinvests

c) Maturity

d) The middle of the life of the instrument

question 3

You buy a T-Bill on the 01/03/2010. It matures on 01/09/2010 and has a face value of R1000 with a discount rate of 6.5%. What is the price that you paid?

question 4

You have a 98 day NCD with a coupon of 4.52%, and a nominal value of R1000. What will the NCD be trading at if there is 60 days left to maturity and the prevailing interest rate remains at 4.52%?

question 5

There is a 91 day bankers' acceptance worth R 50000000. The discount rate is 9.95%. Historic returns for bankers' acceptances are 8.82%. If there is an acceptance commission of 1.5% what is the price of the bankers' acceptance?

question 6

Method of issuance for a zero coupon commercial paper is?

question 7

You have a 98 day NCD with a coupon of 4.52%, and a nominal value of R1000. What is the maturity value of the NCD?

question 8

You have a Canadian 270 day money market instrument with a nominal value of CAD 1000000 and a discount rate of 5%. What is the discount to face value?

Question 9

A small South African company issues zero-coupon commercial paper at the going YTM (yield) rate of 7.5% p.a. for 182-days, and a face value (FV) of R1m. Calculate the investment price?

question 10

You want to earn 15.8% p.a in order to satisfy your capital providers. If a 91 day T-Bill has a face value of R 1000. What is the Price that you will pay for the T-Bill in order to satisfy your Capital providers?