Reading 07 discounted cash flow applications questions and answers

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Reading 07 discounted cash flow applications questions and answers

Reading 7: Discounted Cash Flow ApplicationsQuestion #1 of 71Queston ID: 412888A T-bill with a face value of S100.000 and 140 days until maturity is s

Reading 07 discounted cash flow applications questions and answers selling for $98,000. What is the money market yield?X A) 2.04%.X B) 5.41%./ C) 5.25%.ExnlanalicoThe money market yield is equivalent to the holding pe

riod yield annualized based on a 360-day year. = (2,000 / 98.000)(360 t 140) = 0.0525, Of 5.25%.ReferencesQuestion From: Session 2 > Reading 7 > LOS e Reading 07 discounted cash flow applications questions and answers

Related Material:• Key Concepts by LOSQuestion #2 of 71Oueston ID. 412868On January 1, Jonathan Wood invests $50,000. At the end of March, his investm

Reading 07 discounted cash flow applications questions and answers

ent is worth $51,000. On April 1, Wood deposits $10,000 into his account, and by the end of June, his account is worth $60,000. Wood withdraws $30,000

Reading 7: Discounted Cash Flow ApplicationsQuestion #1 of 71Queston ID: 412888A T-bill with a face value of S100.000 and 140 days until maturity is s

Reading 07 discounted cash flow applications questions and answers ed return for the year is closest to:X A) 7.0%./ B) 10.4%.X C) 5.5%.ExplanationJanuary - March return = 51.000 > 50.000 - 1 = 2.00%April - June return

= 60.0001 (51.000 + 10,000) - 1 - -1.64%July ■ December return = 33.0001 (60.000 - 30,000) - 1 = 10.00%Time-weighted return = [(1 + 0.02X1 - 0.0164)( Reading 07 discounted cash flow applications questions and answers

1 + 0.10)] - 1 = 0.1036 or 10.36%ReferencesQuestion From: Session 2 > Reading 7 > LOS dRelated Material:Key Concepts by LOSQuestion #3 of 71UUWMSUIt I

Reading 07 discounted cash flow applications questions and answers

V. H IZ3UMAn investor has just purchased a Treasury bill for $99,400. If the secunty matures in 40 days and has a holding period yield of 0.604%, what

Reading 7: Discounted Cash Flow ApplicationsQuestion #1 of 71Queston ID: 412888A T-bill with a face value of S100.000 and 140 days until maturity is s

Reading 07 discounted cash flow applications questions and answers ar and does not take into account the effect of compounding. The money market yield = (holding period yield)(360 Ì number of days unbl maturity) = (0.

604%)(360 / 40) = 5.436%.ReferencesQuestion From: Session 2 > Reading 7 > LOS fRelated Material:• Key Concepts by LOS Reading 07 discounted cash flow applications questions and answers

Reading 7: Discounted Cash Flow ApplicationsQuestion #1 of 71Queston ID: 412888A T-bill with a face value of S100.000 and 140 days until maturity is s