Questions: 1. What would be the annualized discount rate and the annualized investment rate % if a Treasury bill was purchased for 59,250 maturing in 220 days for $10.0007 2. In a Treasury auction of $2.3 billion par value 91-day T-bills. the following bids were submitted: 15003 1 DIN If only these competitive bids are received, who will receive T- bills, in what quantity, and at what price? 3. You are considering buying a bond that matures in 10 years from today. The par value of the bond is $10,000 and the coupon rate is 8%. If the current market interest rates are 6%, what is the bond price today if the coupon is paid annually? Based on results, would you consider the bond to be selling at a discount, premium, or at par? 4. An investor is considering two bonds. One is a corporate bond yielding 13%, and is currently selling at par. The marginal tax rate is 28%. The other is a municipal bond with a coupon rate of 10%. Which should the investor choose? 5. A $1,000 par bond with an annual coupon has only one year until maturity. Its current yield is 8.25% and its yield to maturity is 11%. What is the price of the bond? 6. The shares of MSN Inc. are expected to generate the following possible returns over the next 12 months Probuday 11 8.30 If the stock is currently trading at $30 share, what is the expected price in one year. Assume that the stock pays no dividends. 7. Simon Inc's stock price is currently $25.00. It is expected to pay a dividend of $0.75 a share in the current year. Stock analysts predict its price one year from now to be $28.50. Calculate the expected retur 8. Liverpool Holdings expects to pay an annual dividend of $1.75 per share and stock analysts expect the dividend to growth by 6% indefinitely. If Liverpool Holdings current share price is $20, what would be the required rate of return? PLAN LO Q CI31 QMARK) 2022 MARKS 0 MARK A 04 MARK 405 MARK 20 (2MARKS Q7 MARK) A Q8( MARK) Questions: 1. What would be the annualized discount rate and the annualized investment rate % if a Treasury bill was purchased for 59,250 maturing in 220 days for $10.0007 2. In a Treasury auction of $2.3 billion par value 91-day T-bills. the following bids were submitted: 15003 1 DIN If only these competitive bids are received, who will receive T- bills, in what quantity, and at what price? 3. You are considering buying a bond that matures in 10 years from today. The par value of the bond is $10,000 and the coupon rate is 8%. If the current market interest rates are 6%, what is the bond price today if the coupon is paid annually? Based on results, would you consider the bond to be selling at a discount, premium, or at par? 4. An investor is considering two bonds. One is a corporate bond yielding 13%, and is currently selling at par. The marginal tax rate is 28%. The other is a municipal bond with a coupon rate of 10%. Which should the investor choose? 5. A $1,000 par bond with an annual coupon has only one year until maturity. Its current yield is 8.25% and its yield to maturity is 11%. What is the price of the bond? 6. The shares of MSN Inc. are expected to generate the following possible returns over the next 12 months Probuday 11 8.30 If the stock is currently trading at $30 share, what is the expected price in one year. Assume that the stock pays no dividends. 7. Simon Inc's stock price is currently $25.00. It is expected to pay a dividend of $0.75 a share in the current year. Stock analysts predict its price one year from now to be $28.50. Calculate the expected retur 8. Liverpool Holdings expects to pay an annual dividend of $1.75 per share and stock analysts expect the dividend to growth by 6% indefinitely. If Liverpool Holdings current share price is $20, what would be the required rate of return? PLAN LO Q CI31 QMARK) 2022 MARKS 0 MARK A 04 MARK 405 MARK 20 (2MARKS Q7 MARK) A Q8( MARK)
