Money, Banking, and International Finance- A T-bill has a face value of $20,000 with a yield to maturity of 3%, and this bill matures in
270 days. Calculate the market value of this T-bill. - If a consul pays $100 of interest every year and the market interest rate equals 6%, compute
the market value of this consul. - A bond has a face value of $2,000, an interest rate of 10%,and pays interest twice a year. If
the yield to maturity is 5% and the bond matures in three years, calculate the market value of
this bond. - A bond has a face value of $2,000, an interest rate of 10% and pays interest twice a year. If
the yield to maturity is 20% and the bond matures in three years, compute the market value
of this bond. - Explain why money market securities make better investments than capital market
securities. - If you expect the central bank to lower interest rates, define a good investment strategy.
- You bought a discount bond for $4,500. If the bond matures in 3 years with a face value of
$5,000, calculate your yield-to-maturity (YTM). - If a corporation expects to pay $1 dividend every year that grows 3% per year while the
market interest rate is 4%, compute the market value of this stock. - A new internet company does not pay dividends for the first two years. However, in Year 3,
the company will pay a $1 dividend that grows at 5% per year. Calculate the market price of
this stock if the interest rate is 10%.