Rsm 230 Assignment 1

interrogatory 1 i) 91 twenty-four hour period treasury Bill it is a government issued debt obligation that matures in 91 days. It is exchange at a brush off and the buyer is paid the face value at maturity. The fall in is the difference amid the discounted worth and the face value. ii) 90 Day commercial message Paper it is a promissory tone of voice issued by a company that matures in 90 days. In case the emergence company defaults, the buyer has no recourse. as well as to a treasury bill, commercial root word is also interchange at a discount. ii) 90 Day Bankers bankers acceptance it is a short term corporate written report that company sells to its affirm that guarantees it and sells it again to the final stage user. This is used when the buyer is uncertain rough the risk of default by the issuer. iv) BBB considerable term corporate Bond it is a long-term debt obligation issued by a company that has been rated as having adequate substance to meet financia l commitments, but much subject to adverse economic conditions by Standard and Poors. Although they are priced with quoted shew value of 100, they may be sold at either a discount or a premium. ) Prime direct it is the base rate on which a margin is added by the lending bank to calculate ones funding charge. vi) LIBOR LIBOR stands for London Interbank Offer prize. It is the rate that is supercharged when banks borrow loans in the short-term interbank market. enquiry 2 (a) 3 month treasury Bill prescribe (%) 3 month Bankers Acceptance dictate (%) 3 month Prime integrated Paper identify (%) Bank Rate (%) Prime Rate (%) Government of Canada Marketable Bonds, over 10 years (%) declination 31, 2007 3. 2 4. 71 4. 81 4. 50 6 4. 10 declination 31, 2008 0. 83 1. 41 2. 22 1. 75 3. 50 3. 45 celestial latitude 31, 2009 0. 19 0. 33 0. 37 0. 50 2. 25 4. 09 June 30, 2010 0. 50 0. 77 0. 73 0. 75 2. 50 3. 59 (b) Bankers Acceptance and Treasury Bills unfold (in BPs) Prime Corpor ate Paper and Treasury Bills Spread (in BPs) Govt. Of Canada vendable bonds and 3 month Treasury Bills (in BPs) December 31, 2007 89 99 28 December 31, 2008 58 139 262December 31, 2009 14 18 390 June 30, 2010 27 23 309 (c) fff Question 3 (a) US Treasury Bill Rate (%) LIBOR Rate (%) Spread between LIBOR Rate & angstrom unit 3 month US Treasury Bill rate (in BPs) US Commercial Paper 3 month rate (%) Long landmark US Treasury Bond yield (%) Spread between US Long border AA Corporate Bond yield & Long Term US Treasury Bond yield (in BPs) Spread between US Long Term BBB Corporate Bond yield & Lond Term US Treasury Bond yield (in BPs) December 31, 2007 3. 7 4. 07 90. 75 5. 08 4. 03 cxl 204 December 31, 2008 0. 13 1. 43 cxxx 1. 30 2. 22 460 634 December 31, 2009 0. 05 0. 25 20. 06 1. 35 3. 39 162 332 June 30, 2010 0. 18 0. 53 35. 89 1. 35 2. 93 134 299 (b) Fffff (c) Fffff Question 4 (a)