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C. At least 2 per cent b d. Not less than 4 per cent. 6. A 270 day Treasury bill sells for 98 per cent of par. What is the bond-equivalent yield? T a. y = [ 2 / 98 ] x [365 / 270] b, y = [2 / 98 ] x [ 360 / 270 ] c, y = [2 / 100 ] x [ 360 / 270] d, y = [2 / 100] x[365 / 270] Two Treasury Notes have the same par, the same remaining maturity and the same yield o maturity. Which one sells for the higher price? a. It's a trick question. Since Treasury Notes do not have coupons, they would have to sell for the same price. b. Any two Treasury Notes with the same par, maturity, and yield will sell for the same price, regardless of coupon rates. The one with the higher coupon will sell for the higher price. d.The one with the lower coupon will sell for the higher price. What do you know about a bond that is described as a "fallen angel?" a. This bond had a AAA rating when it was issued. b. This bond had a rating of AA or higher when issued. c. This bond had a rating of A or higher when issued. This bond had a rating of BBB or higher when issued. u have bought a one year Treasury bill for 92 per cent of par. If your target real return er cent and the tax rate is zero, what rate of inflation are you expecting? a. Inflation rate = [100 / 92] x [ 1.03 ] b. Inflation rate = [100 / 92)-[ 1.03 ] c. Inflation rate = [ (100 / 92) x ( 1.03 ) ]-1 d. Inflation rate = [ (100 / 92)-( 1.03 ) ]-1

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