You buy a $10,000 par 90 day T-bill that has a bank discount quote of 3.9%. This bill's cost would be _____.

If an investor believes that markets are efficient then which of the following investment strategies fit that belief?

I. Buying and holding a diversified portfolio

II. Attempting to identify mispriced securities

III. Adjusting your portfolio in accordance with forecasts of broad market trends

I and II only

I only

II only

II and III only

A corporation buys preferred stock at $67, holds it one year and sells it at $67 after collecting a $2 dividend. The firm's tax rate is 31%. The firm's after tax rate of return is ______.

2.94%

2.06%

2.71%

2.99%

3.Consider the three stocks in the following table. P_t represents price at time t, and Q_t represents shares outstanding at time t. Stock C splits two-for-one in the last period.

	P0	Q0	P1	Q1	P2	Q2
A	92	100	97	100	97	100
B	52	200	47	200	47	200
C	104	200	114	200	57	400

a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Rate of return %

b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Divisor

4.Consider the three stocks in the following table. P_t represents price at time t, and Q_t represents shares outstanding at time t. Stock C splits two-for-one in the last period.

	P0	Q0	P1	Q1	P2	Q2
A	95	100	100	100	100	100
B	55	200	50	200	50	200
C	110	200	120	200	60	400

Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round your answers to 2 decimal places.)

a. A market valueweighted index

Rate of return %

b. An equally weighted index

Rate of return %

Look at the futures listings for corn in Figure 2.11.

a. Suppose you buy one contract for September 2015 delivery at the closing price. If the contract closes in September at a price of $3.83 per bushel, what will be your profit or loss? (Each contract calls for delivery of 5,000 bushels.) (Round your answer to 2 decimal places.)

of $

b. How many September 2015 maturity contracts are outstanding?

Number of outstanding contracts