12) Debt instruments are also called: _______. A) adjustable notes B) credit instruments C) perpetual securities...
12) Debt instruments are also called: _______.
A) adjustable notes
B) credit instruments
C) perpetual securities
D) interest rate swaps
19) You purchased a one-year Treasury bill at a yield of 3.00% with a price of $97. If you held the investment to maturity, your rate of return will be: _______.
A) 3.09%
B) 2.91%
C) 3.00%
D) unknown because not enough information is given
Homework Answers
12) The correct answer is option A) adjustable notes
Debt instruments are also called adjustable notes
Credit instruments are not debts (opposite of debts)
Perpetual securities simply imply that there is no maturity. Eg. stocks.
Interest rate swaps are derivative instruments
13) The correct answer is option A) 3.09%
Rate of return = Face value/price paid - 1
Rate of return = 100/97 - 1 = 0.03092783505
Rate of return = 3.09%
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