FINN 3222 Exam 1 prep Exam Questions

FINN 3222 Exam 1 prep Exam Questions and Answers (Solved Papers) What is the stop out rate if the US Treasury receives the following amounts of bids available for 1,200 million of securities?250 million Noncompetitive bids 175 million in bids at 3.75% 90 million in bids at 3.80% 140 million in bids at 3.85% 120 million in bids at 3.90% 200 million in bids at 3.95% 300 million in bids at 4.00% 125 million in bids at 4.05% - Correct Answers ✅4.00% This is the point where 1,200 million have been awarded working up from Noncompetitive bids through the lowest bid yields.what is the discount yield equation? - Correct Answers ✅Ydiscount = ( (F-Po) / (F) ) * (360/n) A 90 day T-bill is trading at a price of 99.025. What is the discount yield? - Correct Answers ✅Ydiscount = (( 100-

99.025) / 100 )) * (360/90)

= 3.900% 1 / 2

FINN 3222 Exam 1 prep Exam Questions and Answers (Solved Papers) Which of the following is NOT an aspect of commercial paper?

• They are sold with no more than 270 days to maturity.
• Liquidity "dries up" beyond about 90 days to maturity.
• They are backed by a revolving line of credit.
• They can be issued by companies that have credit ratings

of at least B ("Single B") - Correct Answers ✅d. They can be issued by companies that have credit ratings of at least B ("Single B") You are comparing two sequential T-bill auctions of similar offer amount sizes. The first one had a bid-to-cover ratio of 3.3 while the next one had a bid-to-cover ratio of 2.7. What can be said, either comparatively or in contrast, about these two auctions?

• The first auction had more interest from investors.
• The first auction likely had a higher stop-out rate.
• The second auction had more interest from investors.
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