4.

The discount yield on a T-Bill differs from a bond equivalent yield (BEY) because A) The discount yield is a percentage of face value instead of price B) A 360 day year is used on the discount yield instead of 365 days C) The discount yield is without compounding, the BEY is with compounding D) Both A and B E) A, B and C are all reasons for the difference

5.

The rate of return on a repurchase agreement is A) Determined by the rate of return on the underlying collateral B) Strongly affected by the current Fed funds rate at the time of the repurchase arrangment C) Determined after maturity D) Always higher than normal fed funds rate E) Set by the Federal Reserve

6.	A 60-day $1 million negotiable CD has a 3.0% annual rate quote. If you purchase the CD, how much will you collect in 60 days? A) $1,050,000 B) $1,004,000 C) $1,000,000 D) $1,030,000 E) $1,010,000