KIC000012 - Finance 320 Problem Set #1 1. The rate on a...

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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. AT-bill with 45 days to maturity has an Ask Yield of 4.22% listed in The Wall Street Journal. If you wanted to purchase this T-bill 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 value-weighted indexes and calculate the percentage changes in each. Is the market up or down? What is the return on an equal-weighted index?
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