Sample_Quiz_2_Fall_2010_FIN_353[1] - Sample Quiz 2 FIN 353...

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Sample Quiz 2 FIN 353 Student: ___________________________________________________________________________ 1. Federal funds are A. Borrowed funds from the fed. B. Loans between banks that are usually overnight. C. Lent by banks that have a deficit of reserves. D. All of the above. 2. Commercial paper securities A. Carry an interest rate that varies according to the firm's level of risk. B. Are issued only by the largest and most creditworthy corporations, as they are unsecured. C. Never have a term to maturity that exceeds 270 days. D. All of the above. 3. Consider a coupon bond that has a $1,000 per value and a coupon rate of 10%. The bond’s current price $910? Calculate the current yield. A. 9% B. 10% C. 11% D. 12% 4. Which of the following are characteristics of the money market? A. Trade in one year or less. B. Very liquid. C. Small denomination. D. All of the above. E. A and B. 5. You purchase a Treasury Inflation Protected Securities, TIPS. What is the investment risk that you face? A. Default risk. B. Call risk. C. Purchasing power risk. D. Interest rate risk. 6. Which Treasury security matures between 10 and 30 years? A. Treasury bill. B. Treasury note. C. Treasury bond. D. FNMA.
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7. The least risky type of corporate bond is a? A. Secured bond. B. Debenture bond. C. Subordinated bond. D. Variable rate bond. 8. If the dollar appreciates relative to the Euro? A. American cars become more expensive in Europe. B. French wine becomes more expensive in the US. C. Nothing.
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This note was uploaded on 09/20/2011 for the course FIN 353 taught by Professor Cobus during the Spring '08 term at S.F. State.

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Sample_Quiz_2_Fall_2010_FIN_353[1] - Sample Quiz 2 FIN 353...

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