Which of the Following About the Primary Market Issue of Treasury

question 7

Multiple Choice

Which of the following about the primary market issue of Treasury bonds is correct?

• A) Treasury bonds are issued by a tender system.
• B) Treasury bonds are issued by the 'tap' system of selling.
• C) The issue of Treasury bonds is currently managed by the RBA.
• D) The minimum bid for treasury bonds must be for a face value of $1000 000.

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Definitions:

IRR

Internal Rate of Return, a financial metric used to estimate the profitability of potential investments.

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent or salaries.

Operating Cash Flow

The cash generated from the normal operating activities of a business within a specific time period.

Net Present Value

Net present value is the difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment.