FIN 305 Questions with Correct Solutions
Question:
1. repurchase agreements
Answer:
agreements involving the sale of securities by one party to another with a promise by the
seller to repurchase the same securities from the buyer at a specified date and price.
Question:
2. Broker
Answer:
An agent that acts on behalf of the buyer or seller.
Question:
3. Dealer
Answer:
Act on its own behalf. earns the bid-ask spread. Links buyers and sellers by buying/selling
securities at stated prices.
Question:
4. Commercial paper
Answer:
short-term unsecured debt issued by a company to raise short-term cash.
Question:
5. Negotiable certificates of deposit
Answer:
bank-issued time deposits that specify an interest rate and maturity date and are negotiable
(i.e., can be sold to another party).
Question:
6. Federal Funds
Answer:
short-term funds transferred between financial institutions usually for no more than one day.
Question:
7. treasury bills
Question:
1. repurchase agreements
Answer:
agreements involving the sale of securities by one party to another with a promise by the
seller to repurchase the same securities from the buyer at a specified date and price.
Question:
2. Broker
Answer:
An agent that acts on behalf of the buyer or seller.
Question:
3. Dealer
Answer:
Act on its own behalf. earns the bid-ask spread. Links buyers and sellers by buying/selling
securities at stated prices.
Question:
4. Commercial paper
Answer:
short-term unsecured debt issued by a company to raise short-term cash.
Question:
5. Negotiable certificates of deposit
Answer:
bank-issued time deposits that specify an interest rate and maturity date and are negotiable
(i.e., can be sold to another party).
Question:
6. Federal Funds
Answer:
short-term funds transferred between financial institutions usually for no more than one day.
Question:
7. treasury bills
