3I0-012

3I0-012 practice questions, page 19 of 30, with answer review and explanations.

Question 91

A 3-month (91-day) deposit of AUD 25,000,000.00 is made at 3.25%. At maturity, it is rolled over three times at 3.55% for 90 days, 4.15% for 91 days and 4.19% for 89 days. At the end of 12 months, how much is repaid (principal plus interest)?

  1. AUD 25,962,011.00
  2. AUD 25,959,714.91
  3. AUD 25,948,878.47
  4. AUD 25,948,648.82

Question 92

Which of the following rates represents the highest investment yield in the Euromarket?

  1. Semi-annual bond yield of 3.75%
  2. Annual bond yield of 3.75%
  3. Semi-annual money market yield of 3.75%
  4. Annual money market rate of 3.75%

Question 93

A 3-month (91-day) US Treasury bill is quoted at a rate of discount of 4.25%. What is its true yield?

  1. 4.19%
  2. 4.25%
  3. 4.30%
  4. 4.31%

Question 94

Today’s spot value date is Friday 27th February. What is normally the 1-month maturity date? Assume no bank holidays.

  1. 28th March
  2. 29th March
  3. 30th March
  4. 31st March

Question 95

The Market Segmentation hypothesis suggests that the yield curve bends at some point along its length because:

  1. Investors have less appetite for longer-term investments
  2. Borrowers prefer to borrow long-term but lenders prefer to lend short-term
  3. Different types of institution tend to specialize in different maturity ranges
  4. The risk premium becomes significant only at longer maturities