Question Tag: Treasury bills

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FM – Nov 2021 – L3 – Q6 – Portfolio Management

Analyze the risk profile of Bettaluck plc's short-term equity portfolio and assess investment adjustments based on market returns and financial strategy.

Question

Bettaluck plc is experiencing a substantial net cash inflow, which has been temporarily invested in a short-term equity portfolio. This portfolio consists of investments in four Nigerian listed companies. The funds are intended to meet tax obligations, dividend payments, and future capital expenditures in several months.

Portfolio Details:

Required:

a. Based on the data provided, calculate the risk (i.e., Beta) of Bettaluck’s short-term investment portfolio relative to the market. (4 Marks)

b. Recommend whether the composition of Bettaluck’s short-term investment portfolio should be adjusted. Provide reasons for your recommendation, including relevant calculations. (6 Marks)

c. Discuss the factors a financial manager should consider when investing in marketable securities. (5 Marks)

Answer

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Tags: Capital Gains, Dividend Yield, Financial management, Investment Portfolio, Market Return, Marketable Securities, Portfolio Beta, Risk Assessment, Short-Term Strategy, Treasury bills
Level: Level 3

Topic: Portfolio Management

CSME – May 2017 – L2 – SB – Q3 – Risk Management and Corporate Strategy

Explain business risk to a conservative investor and discuss strategies for risk control and monitoring.

Question

Mallam Danladi is a civil servant who has won a sum of one hundred million Naira in a lottery. Being a very conservative person who is averse to risks, Mallam Danladi is contemplating putting the money in a fixed deposit account at an interest rate of 14% per annum or into treasury bills at an interest rate of 18.5% per annum. These two options are considered to be virtually risk-free. Mr. Madoff, a risk consultant, advised him to invest in the production of shea butter, coconut oil, and black soap, with a promise of 52% profit per annum. In an attempt to convince Mallam Danladi to invest in the production of these items, Mr. Madoff tried to educate him on the nature of risks and how to effectively monitor and control them in ways that will ensure that business remains highly profitable.

Required:

a. Explain briefly the nature of risk in business to Mallam Danladi. (2½ Marks)

b. Discuss FOUR distinct means of controlling business risk. (10 Marks)

c. Explain briefly the purpose of monitoring risks in business. (3 Marks)

d. Discuss THREE ways of monitoring risks in business. (4½ Marks)

Answer

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Tags: Business risk, Financial Decision-Making, Fixed Deposit, Risk Control, Risk Monitoring, Treasury bills
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: MAY 2017

PSAF – Nov 2020 – L2 – Q3b – Public Sector Audit

Discuss five domestic borrowing instruments used by the government to raise capital.

Question

There are various instruments that can be employed for the purpose of raising capital within the domestic economy by government.

Required:
Discuss five of these instruments.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Domestic Borrowing, Government Bonds, Public Finance, Treasury bills
Level: Level 2

Topic: Government Revenue
Series: NOV 2020

BMF – MAY 2015 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets

Identifying which option is not a financial instrument in the money market.

Question

Which of these is NOT a financial instrument traded in the money market?

A. Treasury Bills
B. Call money
C. Development stock
D. Stabilization securities
E. Bill Finance scheme

Answer

Find Related Questions by Tags, levels, etc.

Tags: Call money, Development stock, Financial instruments, Money market, Treasury bills
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: MAY 2015

BMF – May 2022 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets

Identifying the correct market for treasury bills.

Question

The market for treasury bills is called
A. Money market
B. Discount market
C. Financial system
D. Capital market
E. Intermediation market

Answer

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Tags: Discount Market, Money market, Treasury bills
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: MAY 2022

BMF – Nov 2019 – L1 – SA – Q16 – Basics of Business Finance and Financial Markets

Identifying the market where Treasury bills are traded

Question

The market for Treasury bills is known as the:
A. Money market
B. Discount market
C. Financial system
D. Financial market
E. Intermediation market

Answer

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Tags: Money market, Treasury bills
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: NOV 2019

PT – May 2021 – L2 – Q4b – Corporate Tax Liabilities

Compute the tax payable by Fridays Ltd and explain the treatment of rental income and dividends.

Question

Fridays Ltd is a resident company. It provides cleaning services across the country. The following is available from its tax returns for the 2020 year of assessment.

Other relevant information:

The dividend was received from Z Ltd, a resident company where Fridays Ltd has 27% shares.

Required:
i) Compute the tax payable assuming its tax rate is 25%. (6 marks)
ii) Explain the treatment of the following:

Rental income (1 mark)
Dividend (1 mark)

Answer

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Tags: Corporate Tax, Dividend, Rental Income, Treasury bills
Level: Level 2

Topic: Corporate Tax Liabilities
Series: MAY 2021

AFM – Nov 2017 – L3 – Q1c – Treasury and Advanced Risk Management Techniques

Calculating the portfolio risk (beta coefficient) for a combined investment in government securities and the stock market.

Question

Your Uncle has won lotteries and has decided to invest the funds in various securities. His financial advisor advised him to invest 40% of the proceeds into Government Securities (Treasury Bills) and the balance invested in the Stock Market, with funds spread equally among the securities listed on the market.

Required: Advise your Uncle’s Portfolio risk (beta coefficient).

Answer

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Tags: Beta coefficient, Portfolio risk, Stock market investment, Treasury bills
Level: Level 3

Topic: Treasury and Advanced Risk Management Techniques
Series: NOV 2017

FM – April 2022 – L2 – Q3a – Simple interest and compound interest

Compute the terminal value of investments in Treasury bills and fixed deposits over a five-year period and analyze the investment strategy.

Question

An online university is setting up an endowment fund for the financing of scholarship grants. A total of GH¢200 million has been raised through fundraising events. This amount will be invested continuously for 5 years before disbursements will be made from the fund. The Trustees of the Endowment Fund have received a tentative investment strategy from the appointed Investment Manager.

Below is an extract from the tentative investment strategy:

“The seed money will be invested in fixed-income securities and negotiated short-term investments to secure the protection of the principal while earning stable returns over the 5-year gestation period. To achieve this objective, the seed money will be invested as follows: 60% in Government of Ghana 91-day Treasury Bills, 40% in 6-month fixed deposit accounts with top-class universal banks in Ghana. Over the 5-year gestation period, the maturity value of each round of investment will be rolled over as they mature.”

Being the only Trustee with expertise in finance, your fellow Trustees have asked you to do some simulations to inform them about the growth of the fund in the gestation period based on the tentative investment strategy.

Required:
i) Suppose the annual nominal interest rate on the Government of Ghana 91-day Treasury bills will be 15.2514% in year 1, 15.4814% in year 2, 15.7565% in year 3, 15.9478% in year 4, and 16.2146% in year 5. Compute the terminal value of that component of the investment at the end of the fifth year. (5 marks)
ii) Suppose the average nominal interest rate on the fixed deposits will be 16.5% over the next five years. Compute the terminal value of that component of the investment at the end of the fifth year. (3 marks)
iii) Considering the proposed strategy that the maturity value of each round of investment is rolled over as they mature, explain whether the interest that would accrue on the investment over the entire investment period would effectively be a simple interest. (2 marks)

Answer

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Tags: Compound Interest, Endowment Fund, Fixed deposits, Investment strategy, Terminal value, Treasury bills
Level: Level 2

Topic: Simple interest and compound interest
Series: APR 2022

FM – Nov 2021 – L3 – Q6 – Portfolio Management

Analyze the risk profile of Bettaluck plc's short-term equity portfolio and assess investment adjustments based on market returns and financial strategy.

Question

Portfolio Details:

Required:

a. Based on the data provided, calculate the risk (i.e., Beta) of Bettaluck’s short-term investment portfolio relative to the market. (4 Marks)

b. Recommend whether the composition of Bettaluck’s short-term investment portfolio should be adjusted. Provide reasons for your recommendation, including relevant calculations. (6 Marks)

c. Discuss the factors a financial manager should consider when investing in marketable securities. (5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Gains, Dividend Yield, Financial management, Investment Portfolio, Market Return, Marketable Securities, Portfolio Beta, Risk Assessment, Short-Term Strategy, Treasury bills
Level: Level 3

Topic: Portfolio Management

CSME – May 2017 – L2 – SB – Q3 – Risk Management and Corporate Strategy

Explain business risk to a conservative investor and discuss strategies for risk control and monitoring.

Question

Required:

a. Explain briefly the nature of risk in business to Mallam Danladi. (2½ Marks)

b. Discuss FOUR distinct means of controlling business risk. (10 Marks)

c. Explain briefly the purpose of monitoring risks in business. (3 Marks)

d. Discuss THREE ways of monitoring risks in business. (4½ Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business risk, Financial Decision-Making, Fixed Deposit, Risk Control, Risk Monitoring, Treasury bills
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: MAY 2017

PSAF – Nov 2020 – L2 – Q3b – Public Sector Audit

Discuss five domestic borrowing instruments used by the government to raise capital.

Question

There are various instruments that can be employed for the purpose of raising capital within the domestic economy by government.

Required:
Discuss five of these instruments.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Domestic Borrowing, Government Bonds, Public Finance, Treasury bills
Level: Level 2

Topic: Government Revenue
Series: NOV 2020

BMF – MAY 2015 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets

Identifying which option is not a financial instrument in the money market.

Question

Which of these is NOT a financial instrument traded in the money market?

A. Treasury Bills
B. Call money
C. Development stock
D. Stabilization securities
E. Bill Finance scheme

Answer

Find Related Questions by Tags, levels, etc.

Tags: Call money, Development stock, Financial instruments, Money market, Treasury bills
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: MAY 2015

BMF – May 2022 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets

Identifying the correct market for treasury bills.

Question

The market for treasury bills is called
A. Money market
B. Discount market
C. Financial system
D. Capital market
E. Intermediation market

Answer

Find Related Questions by Tags, levels, etc.

Tags: Discount Market, Money market, Treasury bills
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: MAY 2022

BMF – Nov 2019 – L1 – SA – Q16 – Basics of Business Finance and Financial Markets

Identifying the market where Treasury bills are traded

Question

The market for Treasury bills is known as the:
A. Money market
B. Discount market
C. Financial system
D. Financial market
E. Intermediation market

Answer

Find Related Questions by Tags, levels, etc.

Tags: Money market, Treasury bills
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: NOV 2019

PT – May 2021 – L2 – Q4b – Corporate Tax Liabilities

Compute the tax payable by Fridays Ltd and explain the treatment of rental income and dividends.

Question

Fridays Ltd is a resident company. It provides cleaning services across the country. The following is available from its tax returns for the 2020 year of assessment.

Other relevant information:

The dividend was received from Z Ltd, a resident company where Fridays Ltd has 27% shares.

Required:
i) Compute the tax payable assuming its tax rate is 25%. (6 marks)
ii) Explain the treatment of the following:

Rental income (1 mark)
Dividend (1 mark)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Tax, Dividend, Rental Income, Treasury bills
Level: Level 2

Topic: Corporate Tax Liabilities
Series: MAY 2021

AFM – Nov 2017 – L3 – Q1c – Treasury and Advanced Risk Management Techniques

Calculating the portfolio risk (beta coefficient) for a combined investment in government securities and the stock market.

Question

Required: Advise your Uncle’s Portfolio risk (beta coefficient).

Answer

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Tags: Beta coefficient, Portfolio risk, Stock market investment, Treasury bills
Level: Level 3

Topic: Treasury and Advanced Risk Management Techniques
Series: NOV 2017

FM – April 2022 – L2 – Q3a – Simple interest and compound interest

Compute the terminal value of investments in Treasury bills and fixed deposits over a five-year period and analyze the investment strategy.

Question

Below is an extract from the tentative investment strategy:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Compound Interest, Endowment Fund, Fixed deposits, Investment strategy, Terminal value, Treasury bills
Level: Level 2

Topic: Simple interest and compound interest
Series: APR 2022

Question Tag: Treasury bills

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FM – Nov 2021 – L3 – Q6 – Portfolio Management

Analyze the risk profile of Bettaluck plc's short-term equity portfolio and assess investment adjustments based on market returns and financial strategy.

Required:

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CSME – May 2017 – L2 – SB – Q3 – Risk Management and Corporate Strategy

Explain business risk to a conservative investor and discuss strategies for risk control and monitoring.

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PSAF – Nov 2020 – L2 – Q3b – Public Sector Audit

Discuss five domestic borrowing instruments used by the government to raise capital.

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BMF – MAY 2015 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets

Identifying which option is not a financial instrument in the money market.

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BMF – May 2022 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets

Identifying the correct market for treasury bills.

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BMF – Nov 2019 – L1 – SA – Q16 – Basics of Business Finance and Financial Markets

Identifying the market where Treasury bills are traded

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PT – May 2021 – L2 – Q4b – Corporate Tax Liabilities

Compute the tax payable by Fridays Ltd and explain the treatment of rental income and dividends.

You're reporting an error for "PT – May 2021 – L2 – Q4b – Corporate Tax Liabilities"

AFM – Nov 2017 – L3 – Q1c – Treasury and Advanced Risk Management Techniques

Calculating the portfolio risk (beta coefficient) for a combined investment in government securities and the stock market.

You're reporting an error for "AFM – Nov 2017 – L3 – Q1c – Treasury and Advanced Risk Management Techniques"

FM – April 2022 – L2 – Q3a – Simple interest and compound interest

Compute the terminal value of investments in Treasury bills and fixed deposits over a five-year period and analyze the investment strategy.

You're reporting an error for "FM – April 2022 – L2 – Q3a – Simple interest and compound interest"

FM – Nov 2021 – L3 – Q6 – Portfolio Management

Analyze the risk profile of Bettaluck plc's short-term equity portfolio and assess investment adjustments based on market returns and financial strategy.

Required:

You're reporting an error for "FM – Nov 2021 – L3 – Q6 – Portfolio Management"

CSME – May 2017 – L2 – SB – Q3 – Risk Management and Corporate Strategy

Explain business risk to a conservative investor and discuss strategies for risk control and monitoring.

You're reporting an error for "CSME – May 2017 – L2 – SB – Q3 – Risk Management and Corporate Strategy"

PSAF – Nov 2020 – L2 – Q3b – Public Sector Audit

Discuss five domestic borrowing instruments used by the government to raise capital.

You're reporting an error for "PSAF – Nov 2020 – L2 – Q3b – Public Sector Audit"

BMF – MAY 2015 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets

Identifying which option is not a financial instrument in the money market.

You're reporting an error for "BMF – MAY 2015 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets"

BMF – May 2022 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets

Identifying the correct market for treasury bills.

You're reporting an error for "BMF – May 2022 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets"

BMF – Nov 2019 – L1 – SA – Q16 – Basics of Business Finance and Financial Markets

Identifying the market where Treasury bills are traded

You're reporting an error for "BMF – Nov 2019 – L1 – SA – Q16 – Basics of Business Finance and Financial Markets"

PT – May 2021 – L2 – Q4b – Corporate Tax Liabilities

Compute the tax payable by Fridays Ltd and explain the treatment of rental income and dividends.

You're reporting an error for "PT – May 2021 – L2 – Q4b – Corporate Tax Liabilities"

AFM – Nov 2017 – L3 – Q1c – Treasury and Advanced Risk Management Techniques

Calculating the portfolio risk (beta coefficient) for a combined investment in government securities and the stock market.

You're reporting an error for "AFM – Nov 2017 – L3 – Q1c – Treasury and Advanced Risk Management Techniques"

FM – April 2022 – L2 – Q3a – Simple interest and compound interest

Compute the terminal value of investments in Treasury bills and fixed deposits over a five-year period and analyze the investment strategy.

You're reporting an error for "FM – April 2022 – L2 – Q3a – Simple interest and compound interest"

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