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Company
Shares
Outstanding
Price per Share
Finance 320
Problem Set #1
1.
The rate on a banker's acceptance, quoted on a bank discount basis, is 6 percent. The security
has a face value of$100,000 and will mature in 71 days. What is its price?
2.
ATbill
with 45 days to maturity has an Ask Yield of 4.22% listed in
The Wall Street
Journal.
If you wanted to purchase this Tbill with face value of $10,000, how much would you
have to pay?
3. A money market instrument with 60 days to maturity has a quoted ask price of 99, meaning
$99 per $100 dollars of face value.
What are the banker's discount yield, the bond equivalent
yield, and the effective annual return?
4. Suppose there are only two stocks in the market and the following information is given:
Beginning
End of
of Year
Year
Digimax
Wintech
10 million
30 million
$70
$56
$40
$48
.Construct price and valueweighted indexes and calculate the percentage changes in each. Is the
market up or down? What is the return on an equalweighted index?
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 Fall '10
 Sapp
 Finance

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