1.The following are the expected 1 year T-bill rates for the next 4 years: 3%, 4%, 5%, and 6%. What would you expect the rate for 3 year securities would be?
A. 4%
B. 4.5%
C. 6%
D. 3.75%
2.If average daily remittances are $6 million, and "extended disbursement float" adds 2 days to the disbursement schedule, how much should the firm be willing to pay for a cash management system if the firm earns 7% on excess funds.
A. $500,000
B. $1,500,000
C. $0
D. $840,000
3.A 15-year zero-coupon bond was issued with a $1000 par value to yield 8%. What is the approximate market value of the bond?
A. $597
B. $315
C. $27
D. $482
4.Sharon Smith will receive $1 million in 50 years. The discount rate is 14%. As an alternative, she can receive $1,000 today. Which should she choose?
A. the $1 million dollars in 50 years.
B. $2,000 today.
C. $1,00
D. need more information.