1. The bond equivalent yield of a 110-day bankers acceptance quoted at a discount rate of 4.25% for a 360-day year is closet to:

4.31%	4.34%
4.40%	none of the above.

2. An investor is considering the purchase of a 2-year bond with a 5% coupon rate, with interest paid annually. Assuming the following sequence of spot rate: 1 year, 3.5% and 2 year, 4%, the yield to maturity of the bond is:

3.00%	3.50%
4.00%	none of the above.

3. Effective duration is commonly used for:

Government Bonds	Bonds with embedded options
Equity Assets	none of the above.

4. Stedsmart Ltd. And Fignermo Ltd. Are alike with respect to financial and operating characteristics, except that Stedsmart Ltd. Has less publicly traded debt outstanding than Fignermo Ltd. Stedsmart is most likely to have:

No market liquidity risk	Lower market liquidity risk
Higher market liquidity risk	none of the above.

5. If credit spreads narrow it means, among other things, that investors:

1. Are encountering less liquidity in corporate bond markets
2. Perceive greater creditworthiness in fixed-income markets
3. Are concerned about weakening creditworthiness
4. None of the above