a) [4 marks] Debt securities are also called ______________________ securities because they involve contractually agreed amounts and schedule of payments. The number of years to the maturity date is called the ______________________ to maturity.

b). [4 marks] Using _______________________, a corporation can avoid holding idle funds by buying T-bills from a bank, which agrees to buy back the securities in the future at a higher price. Since the corporation gets to keep the T-bills if the bank defaults, the T-bills in effect act as _____________________.

c). [4 marks] The formula used to calculate the yield to maturity on a 4-year 2% coupon bond with $1000 face value that sells for $1050 is __________________________________________________________ . [Please write down the formula with known numbers plugged in; there is no need to solve for the yield]