1. What is the bank discount rate on a $100,000 face value T-bill priced at $97,500, maturing in 181 days?

1. 2.50%
2. 4.84%
3. 4.97%
4. 5.10%
5. None of the above

2. The bank discount rate (ask) on a 71-day T-bill is 4.86%. What is the bond equivalent yield on the T-bill?

1. 4.86%
2. 4.92%
3. 4.98%
4. 5.14%
5. None of the above

3. The T-bill rate quoted by the Federal Reserve banks is the

1. bank discount rate.
2. the true rate.
3. effective annual rate.
4. bond equivalent rate.
5. None of the above.

4. A dealer is quoting a 180-day T-Bill with a face value of $10,000 that is quoted at 3.75 bid, 3.60 ask. This bill can be bought at ________ or can be sold at ________.

1. $9,879.23; $9,864.36
2. $9,864.36; $9,859.23
3. $9,820.00; $9,812.50
4. $9,802.50; $9,787.50
5. None of the above.

[Bond Markets]

5. You purchase a Treasury inflation-protected note with an original principal amount of $1,000,000 and a 2.8 percent annual coupon (paid semiannually). What will the first coupon payment be if the semiannual inflation over the first six months is 1.2%?

1. $14,168
2. $14,000
3. $28,336
4. $28,000
5. None of the above

6. For a taxpayer in the 15% marginal tax bracket, a 15-year municipal bond currently yielding 6.2% would offer an equivalent taxable yield of:

1. 6.2%.
2. 5.27%.
3. 8.32%.
4. 7.29%.
5. None of the above.