The money market is the market where 1. la) Phe issuer of the assets sells them to the investors. The investors trade assets among CThe government T-Bills are traded. d) The investors sell corporate bonds that were issued last year. e) None of these answers is correct. themselves. 2. You request a personal loan from 4 different banks. Bank A demands 8% interest compound annually. Bank B demands 8% interest compound semi-annually. Bank C demands 8% compound quarterly. Bank D demands 8% compound monthly. Which bank would be most rational to borrow from? a) Bank A b) Bank B Bank C Bank D 3. A friend owes you 10000$. He offers you 3 choices of paying you back: 10000$ today or 12800S in 2 years (October 2014) or 14800S in 4 years (October 2016). If the interest rate is 12% compound semi-annually, which option is the most rational for choose? you 10000S today 12800S in 2 years c) 14800S in 4 years d) I'll be indifferent 4. Among 4 following statements, which one (s) does not (do not) corespond to a conventional Bond? 1- A conventional bond is a debt. 2- The bond holder does not have the right to vote in the company. 3- The bonds price has a positive relation with the required return. 4 Offers only variable coupons until maturity. a) Statement 3 and 4. b) Statements 1 and 3. \c) Statements 2 and 3. Statement 2, 3 and 4 5. If we anticipate an decrease of the interest rate in the next 6 months, we should purchase bonds of which: a) Phie coupon rate is high and maturity is close. The coupon rate is low and maturity is close. cNThe coupon rate is high and maturity is far. d) The coupon rate is low and maturity is far. 6.You just purchased a convertible bond. Today, the strictly debt value is inferior relative to the conversion valuc. If the required return on common shares increases: a) The minimum price of the bond will decrease. b) The minimum price of the bond will increase. c The minimum price of the bond remains the same. WThe strictly debt value of the bond will be superior to the conversion value. e) t is impossible to make that determination with this information