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Chapter 02 Asset Classes and Financial Instruments

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Question;1.;Which of the;following is not a characteristic;of a money market instrument?;A.;Liquidity;B.;Marketability;C.;Long maturity;D.;Liquidity;premium;E.;Long maturity;and liquidity premium;2.;The money market is;a subsector of the;A.;commodity;market.;B.;capital;market.;C.;derivatives;market.;D.;equity;market.;E.;None of the;options;3.;Treasury;Inflation-Protected Securities (TIPS);A.;pay a fixed;interest rate for life.;B.;pay a;variable interest rate that is indexed to inflation, but maintain a;constant principal.;C.;provide a;constant stream of income in real (inflation-adjusted) dollars.;D.;have their;principal adjusted in proportion to the Consumer Price Index.;E.;provide a;constant stream of income in real (inflation-adjusted) dollars and have;their principal adjusted in proportion to the Consumer Price Index.;4.;Which one of the;following is not a money market;instrument?;A.;Treasury bill;B.;Negotiable;certificate of deposit;C.;Commercial;paper;D.;Treasury bond;E.;Eurodollar;account;5.;T-bills are;financial instruments initially sold by ________ to raise funds.;A.;commercial;banks;B.;the U.S.;government;C.;state and;local governments;D.;agencies of;the federal government;E.;the U.S.;government and agencies of the federal government;6.;The bid price of a;T-bill in the secondary market is;A.;the price at;which the dealer in T-bills is willing to sell the bill.;B.;the price at;which the dealer in T-bills is willing to buy the bill.;C.;greater than;the asked price of the T-bill.;D.;the price at;which the investor can buy the T-bill.;E.;never quoted;in the financial press.

 

Paper#55070 | Written in 18-Jul-2015

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