Question: CBA arranges financing for Super Duper Pty Ltd with a 90 day bank bill with a Face Value of $500,000. City Investments buy the bill

CBA arranges financing for Super Duper Pty Ltd with a 90 day bank bill with a Face Value of $500,000. City Investments buy the bill when it is first issued at a yield of 3.25% pa and sell it 30 days later to Prudential Investments at a yield of 3.65% pa. What price does City Investments sell the bill for?

	a.	$500,000.00
	b.	$497,342.96
	c.	$498,504.49
	d.	$482,392.67
	e.	$497,017.89

What would you pay for a bond that pays an annual coupon of $45, has a face value of $1,000, matures in 11 years, and has a yield to maturity of 10%?

	a.	$1,107.41
	b.	$958.47
	c.	$1,000.00
	d.	$642.77
	e.	$693.77

What is the market value of a bond that will pay a total of fifty semi-annual coupons of $50 each over the remainder of its life? Assume the bond has a $1,000 face value and a 12% yield to maturity.

	a.	$1,000.00
	b.	$1,214.82
	c.	$418.69
	d.	$842.38
	e.	$833.91

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