, Student:
1. Which of the following is not a money market instrument?
A. Treasury bill
B. commercial paper
C. preferred stock
D. bankers' acceptance
2. T-bills are issued with initial maturities of:
I. 4 weeks
II. 16 weeks
III. 26 weeks
IV. 32 weeks
A. I and II only
B. I and III only
C. I, II, and III only
D. I, II, III, and IV
3. When computing the bank discount yield, you would use days in the year.
A. 260
B. 360
C. 365
D. 366
4. A dollar-denominated deposit at a London bank is called .
A. eurodollars
B. LIBOR
C. fed funds
D. bankers' acceptance
5. Money market securities are sometimes referred to as cash equivalents because .
A. they are safe and marketable
B. they are not liquid
C. they are high-risk
D. they are low-denomination
6. The most marketable money market security is .
A. Treasury bills
B. bankers' acceptances
C. certificates of deposit
D. common stock
7. The minimum tick size, or spread between prices in the Treasury bond market, is
A. 1/8 of a point.
B. 1/16 of a point.
C. 1/32 of a point.
D. 1/128 of a point.
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,8. An investor in a T-bill earns interest by .
A. receiving interest payments every 90 days
B. receiving dividend payments every 30 days
C. converting the T-bill at maturity into a higher-valued T-note
D. buying the bill at a discount from the face value to be received at maturity
9. would not be included in the EAFE index.
A. Australia
B. Canada
C. France
D. Japan
10. is considered to be an emerging market country.
A. France
B. Norway
C. Brazil
D. Canada
11. Which one of the following is a true statement?
A. Dividends on preferred stocks are tax-deductible to individual investors but not to corporate investors.
B. Common dividends cannot be paid if preferred dividends are in arrears on cumulative preferred stock.
C. Preferred stockholders have voting power.
D. Investors can sue managers for nonpayment of preferred dividends.
12. The bid price of a Treasury bill is .
A. the price at which the dealer in Treasury bills is willing to sell the bill
B. the price at which the dealer in Treasury bills is willing to buy the bill
C. greater than the ask price of the Treasury bill expressed in dollar terms
D. the price at which the investor can buy the Treasury bill
13. The German stock market is measured by which market index?
A. FTSE
B. Dow Jones 30
C. DAX
D. Nikkei
14. Deposits of commercial banks at the Federal Reserve are called .
A. bankers' acceptances
B. federal funds
C. repurchase agreements
D. time deposits
15. Which of the following is not a true statement regarding municipal bonds?
A. A municipal bond is a debt obligation issued by state or local governments.
B. A municipal bond is a debt obligation issued by the federal government.
C. The interest income from a municipal bond is exempt from federal income taxation.
D. The interest income from a municipal bond is exempt from state and local taxation in the issuing state.
16. Which of the following is not a characteristic of a money market instrument?
A. liquidity
B. marketability
C. low risk
D. maturity greater than 1 year
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, 17. An individual who goes short in a futures position .
A. commits to delivering the underlying commodity at contract maturity
B. commits to purchasing the underlying commodity at contract maturity
C. has the right to deliver the underlying commodity at contract maturity
D. has the right to purchase the underlying commodity at contract maturity
18. Which of the following is not a nickname for an agency associated with the mortgage markets?
A. Fannie Mae
B. Freddie Mac
C. Sallie Mae
D. Ginnie Mae
19. Commercial paper is a short-term security issued by to raise funds.
A. the Federal Reserve
B. the New York Stock Exchange
C. large well-known companies
D. all of these options
20. The maximum maturity on commercial paper is .
A. 270 days
B. 180 days
C. 90 days
D. 30 days
21. Which one of the following is a true statement regarding the Dow Jones Industrial Average?
A. It is a value-weighted average of 30 large industrial stocks.
B. It is a price-weighted average of 30 large industrial stocks.
C. It is a price-weighted average of 100 large stocks traded on the New York Stock Exchange.
D. It is a value-weighted average of all stocks traded on the New York Stock Exchange.
22. Treasury bills are financial instruments issued by to raise funds.
A. commercial banks
B. the federal government
C. large corporations
D. state and city governments
23. Which of the following are true statements about T-bills?
I. T-bills typically sell in denominations of $10,000.
II. Income earned on T-bills is exempt from all federal taxes.
III. Income earned on T-bills is exempt from state and local taxes.
A. I only
B. I and II only
C. I and III only
D. I, II, and III
24. A bond that has no collateral is called a .
A. callable bond
B. debenture
C. junk bond
D. mortgage
25. A gives its holder the right to sell an asset for a specified exercise price on or before a specified expiration date.
A. call option
B. futures contract
C. put option
D. interest rate swap
mynursytest.store
1. Which of the following is not a money market instrument?
A. Treasury bill
B. commercial paper
C. preferred stock
D. bankers' acceptance
2. T-bills are issued with initial maturities of:
I. 4 weeks
II. 16 weeks
III. 26 weeks
IV. 32 weeks
A. I and II only
B. I and III only
C. I, II, and III only
D. I, II, III, and IV
3. When computing the bank discount yield, you would use days in the year.
A. 260
B. 360
C. 365
D. 366
4. A dollar-denominated deposit at a London bank is called .
A. eurodollars
B. LIBOR
C. fed funds
D. bankers' acceptance
5. Money market securities are sometimes referred to as cash equivalents because .
A. they are safe and marketable
B. they are not liquid
C. they are high-risk
D. they are low-denomination
6. The most marketable money market security is .
A. Treasury bills
B. bankers' acceptances
C. certificates of deposit
D. common stock
7. The minimum tick size, or spread between prices in the Treasury bond market, is
A. 1/8 of a point.
B. 1/16 of a point.
C. 1/32 of a point.
D. 1/128 of a point.
mynursytest.store
,8. An investor in a T-bill earns interest by .
A. receiving interest payments every 90 days
B. receiving dividend payments every 30 days
C. converting the T-bill at maturity into a higher-valued T-note
D. buying the bill at a discount from the face value to be received at maturity
9. would not be included in the EAFE index.
A. Australia
B. Canada
C. France
D. Japan
10. is considered to be an emerging market country.
A. France
B. Norway
C. Brazil
D. Canada
11. Which one of the following is a true statement?
A. Dividends on preferred stocks are tax-deductible to individual investors but not to corporate investors.
B. Common dividends cannot be paid if preferred dividends are in arrears on cumulative preferred stock.
C. Preferred stockholders have voting power.
D. Investors can sue managers for nonpayment of preferred dividends.
12. The bid price of a Treasury bill is .
A. the price at which the dealer in Treasury bills is willing to sell the bill
B. the price at which the dealer in Treasury bills is willing to buy the bill
C. greater than the ask price of the Treasury bill expressed in dollar terms
D. the price at which the investor can buy the Treasury bill
13. The German stock market is measured by which market index?
A. FTSE
B. Dow Jones 30
C. DAX
D. Nikkei
14. Deposits of commercial banks at the Federal Reserve are called .
A. bankers' acceptances
B. federal funds
C. repurchase agreements
D. time deposits
15. Which of the following is not a true statement regarding municipal bonds?
A. A municipal bond is a debt obligation issued by state or local governments.
B. A municipal bond is a debt obligation issued by the federal government.
C. The interest income from a municipal bond is exempt from federal income taxation.
D. The interest income from a municipal bond is exempt from state and local taxation in the issuing state.
16. Which of the following is not a characteristic of a money market instrument?
A. liquidity
B. marketability
C. low risk
D. maturity greater than 1 year
mynursytest.store
, 17. An individual who goes short in a futures position .
A. commits to delivering the underlying commodity at contract maturity
B. commits to purchasing the underlying commodity at contract maturity
C. has the right to deliver the underlying commodity at contract maturity
D. has the right to purchase the underlying commodity at contract maturity
18. Which of the following is not a nickname for an agency associated with the mortgage markets?
A. Fannie Mae
B. Freddie Mac
C. Sallie Mae
D. Ginnie Mae
19. Commercial paper is a short-term security issued by to raise funds.
A. the Federal Reserve
B. the New York Stock Exchange
C. large well-known companies
D. all of these options
20. The maximum maturity on commercial paper is .
A. 270 days
B. 180 days
C. 90 days
D. 30 days
21. Which one of the following is a true statement regarding the Dow Jones Industrial Average?
A. It is a value-weighted average of 30 large industrial stocks.
B. It is a price-weighted average of 30 large industrial stocks.
C. It is a price-weighted average of 100 large stocks traded on the New York Stock Exchange.
D. It is a value-weighted average of all stocks traded on the New York Stock Exchange.
22. Treasury bills are financial instruments issued by to raise funds.
A. commercial banks
B. the federal government
C. large corporations
D. state and city governments
23. Which of the following are true statements about T-bills?
I. T-bills typically sell in denominations of $10,000.
II. Income earned on T-bills is exempt from all federal taxes.
III. Income earned on T-bills is exempt from state and local taxes.
A. I only
B. I and II only
C. I and III only
D. I, II, and III
24. A bond that has no collateral is called a .
A. callable bond
B. debenture
C. junk bond
D. mortgage
25. A gives its holder the right to sell an asset for a specified exercise price on or before a specified expiration date.
A. call option
B. futures contract
C. put option
D. interest rate swap
mynursytest.store
