1. Debt securities issued by a small firm may be ________, meaning that _______ investors want to invest in those securities.
a. liquid; many
b. liquid; not many
c. illiquid; not many
d. illiquid; many
2. The interest rate that the Fed targets for its monetary policy is the:
a. commercial paper rate.
b. federal funds rate.
c. Treasury bond coupon rate.
d. one-year certificate of deposit rate.
3. You are considering the purchase of a tax-exempt security that is paying a yield of 13 percent. You are in the 35 percent tax bracket. To match this after-tax yield, you would consider taxable securities that pay
a. 17.55 percent.
b. 19 percent.
c. 37.14 percent.
d. 20 percent.
please show work as to how the answer was derived