Chapter 11 - C hapter 11 Question 2. A t reasury bond...

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Chapter 11 Question 2. A treasury bond issued 29 years ago with six months remaining before it matures is not a money market Instrument yet only when it matures. Then it is sold with 29, 91, and 182 maturities. 4. The different between term security and demand security is that a negotiable certificate of deposit is a bank issued security that documents a deposit and specifies the interest rate and the maturity date. Because a maturity date is specified, a CD is a term security as opposed to a demand deposit: Term securities have a specified maturity date; demand deposits can be withdrawn at any time. A negotiable CD is also called a bearer instrument. This means that whoever holds the instrument at maturity receives the principal and interest. Quantitative 1. Interest= $5000-$4925 X 365 = 3.05% $4925 182 2. What is the annualized yield on a Treasury bill that you purchase for $9,940 and will mature in 91 days for $10,000 would be 2.42% Web Exercise: 1-day period there is a slight increase. 7-day period there is an increase. 3-month term there is a slight increase. Annual term there is an increase. Chapter 7 Question 2. The primary markets are stocks and bonds. Largest purchasers are households. 4.
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This note was uploaded on 06/03/2011 for the course FIN 370 taught by Professor Kelly during the Spring '11 term at Columbus State University.

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Chapter 11 - C hapter 11 Question 2. A t reasury bond...

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