Scribd Logo
Upload

Welcome to Scribd!

  • 28 views

    Quiz1 Investment

    Uploaded by

    alice123h21
    1. The document is a quiz for a finance class containing 5 multiple choice questions about financial concepts like yield calculations on bonds and bills, margin calculations for stock purchases, and tax implications of municipal versus corporate bonds. 2. The questions calculate bank discount yield, bond equivalent yield, effective annual yield, bid-ask spreads, costs of market orders, margin requirements, and profits/losses from short stock positions. 3. Financial formulas are provided for calculations including yield, tax rates, margin, and changes in account equity.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Quiz1 Investment

    Uploaded by

    alice123h21
    28 views2 pages
    1. The document is a quiz for a finance class containing 5 multiple choice questions about financial concepts like yield calculations on bonds and bills, margin calculations for stock purchases, and tax implications of municipal versus corporate bonds. 2. The questions calculate bank discount yield, bond equivalent yield, effective annual yield, bid-ask spreads, costs of market orders, margin requirements, and profits/losses from short stock positions. 3. Financial formulas are provided for calculations including yield, tax rates, margin, and changes in account equity.

    Original Description:

    investment quiz

    Original Title

    Quiz1 investment

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1. The document is a quiz for a finance class containing 5 multiple choice questions about financial concepts like yield calculations on bonds and bills, margin calculations for stock purchases, and tax implications of municipal versus corporate bonds. 2. The questions calculate bank discount yield, bond equivalent yield, effective annual yield, bid-ask spreads, costs of market orders, margin requirements, and profits/losses from short stock positions. 3. Financial formulas are provided for calculations including yield, tax rates, margin, and changes in account equity.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    28 views2 pages

    Quiz1 Investment

    Uploaded by

    alice123h21
    1. The document is a quiz for a finance class containing 5 multiple choice questions about financial concepts like yield calculations on bonds and bills, margin calculations for stock purchases, and tax implications of municipal versus corporate bonds. 2. The questions calculate bank discount yield, bond equivalent yield, effective annual yield, bid-ask spreads, costs of market orders, margin requirements, and profits/losses from short stock positions. 3. Financial formulas are provided for calculations including yield, tax rates, margin, and changes in account equity.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 2

    Quiz #1

    Finance 333 Investments


    Professor Yan

    Name: ____________
    ID: _______________

    1. Consider a T-bill with a $10,000 face value, 180 days to maturity and a current price of $9,800. What is
    the Bank Discount Yield? What is the Bond Equivalent Yield? What is the Effective Annual Yield?

    2. The current market prices for IBM are $76.05 - $76.10. What is the bid-ask spread? How much does it
    cost you to buy 100 shares of IBM if you place a market order (excluding commission)? If you place a
    limit sell order at $76.08, will your order be executed immediately? Briefly explain (one sentence).

    3. The yield of a municipal bond is 6%. The yield of an otherwise identical corporate bond is 8%. If you
    are indifferent between these two bonds, what must be your marginal tax rate?

    4. Margin is the percentage of the investment that is not borrowed. If you bought 400 shares of IBM stock
    at $50 per share and borrowed $5,000, what is your initial margin? If the maintenance margin is 40%, at
    what price you will receive a margin call?

    5. You sell short 100 shares of XYZ at $50 per share. If the initial margin is 50%, how much money do
    you need to put in your account? If the price goes down to $40, how much money do you make or lose? If
    the price goes up to $55, what is your margin?

    10,000 P 360

    BDY =
    10,000
    n
    margin =

    10,000 P 365

    BEY =
    P
    n

    10,000 P
    EAY = 1 +

    365
    n

    RA = RP (1 )

    Account Equity
    Market Value of the Position Ammount You Borrowed
    =
    Market Value of the Position
    Market Value of the Position

    You might also like