FINA3331_Ch2_Study Guide - Chapter Two INVESTMENT...

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10 Chapter Two Investment Alternatives Chapter Two INVESTMENT ALTERNATIVES Multiple Choice Questions 1. The largest single institutional owner of common stocks is: a. mutual funds. b. insurance companies. c. pension funds d. commercial banks (c) 2. Which of the following is not one of the characteristics of the primary nonmarketable financial assets owned by most individuals? a. high liquidity b. high return c. often issued by the U.S. government d. low risk (b) 3. Treasury bills are traded in the --------------------- . a. money market. b. capital market. c. government market. d. regulated market. (a) 4. Which of the U.S. Treasury securities is always sold at a discount? a. Treasury bills b. Treasury notes c. Treasury bonds d. All of the Treasury securities are sold at a discount. (a)
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11 Chapter Two Investment Alternatives 5. Which of the following would not be considered a capital market security? a. a 20-year corporate bond b. a common stock c. a 6-month Treasury bill d. a mutual fund share (c) 6. The coupon rate is another name for the: a. market interest rate. b. current yield. c. stated interest rate. d. yield to maturity (c) 7. Zero-coupon bonds are similar to Treasury bills in that both: a. are issued exclusively by the U.S. Treasury. b. are money-market securities. c. are capital-market securities. d. are sold at less than par. (d) 8. Each point on a bond quote represents: a. $100 b. 1 percent of $100 c. 1 percent of $1000 d. $1000 (c) 9. Bonds called in are likely to be: a. bonds already in default. b.
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This note was uploaded on 06/02/2011 for the course FINA 3331 taught by Professor Staff during the Spring '08 term at Texas A&M University, Corpus Christi.

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FINA3331_Ch2_Study Guide - Chapter Two INVESTMENT...

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