1. The price quotations of treasury bonds with maturity of 08/31/2018 in the WSj showa bid price of 100,5547 and add price of100,5703 At what price can you buy the treasury bond with a face of$1000 from a bond dealer?

A) $1,000

B) 1,005.547

C) 1,005.703

D) 100.5547

E) 100.5703

2. A tax-exempt bond provides a yield of 49% what are the equivalent taxable yields on the bond for investor with 25% and 39.69% tax rate respectively?

A) 2.62% and 2.114%

B) 3% and 2.416%

c) 4% and 4%

D) 4.667% and 5.795%

E) 5.333% and 6.623%

3. The yield ration is a key determinant of the attractiveness of municipal bond. The ______ the yield ratio, the ______ the cutoff tax bracket. And more individuals will prefer to hold municipal bonds.

A) higher, lower

B) higher, higher

C) lower, higher

D) lower, lower