QCHAPTER 2

QCHAPTER 2 - Chapter Two INVESTMENT ALTERNATIVES Multiple...

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Chapter Two INVESTMENT ALTERNATIVES Multiple Choice Questions Organizing Financial Assets 1. The largest single institutional owner of common stocks is: a. mutual funds. b. insurance companies. c. pension funds d. commercial banks Nonmarketable Financial Assets 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 3. Savings accounts are ---------- but are not------------. a. negotiable; liquid. b. marketable; liquid. c. liquid; personal d. liquid; marketable Money Market Securities 4. Series EE bonds must be held at least ------- years in order to receive the guaranteed minimum rate. a. 3 b. 5 c. 8 d. 10 5. Treasury bills are traded in the --------------------- . a. money market. b. capital market. c. government market. d. regulated market. 10 Chapter Two Investment Alternatives
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6. 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. 7. Which of the following statements regarding money market instruments is not true? a. They tend to be highly marketable. b. They tend to require a small dollar investment. c. They tend to have a low probability of default. d. Their rates tend to move together. Fixed Income Securities 8. 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 9. The coupon rate is another name for the: a. market interest rate. b. current yield. c. stated interest rate. d. yield to maturity 10. 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. 11. Each point on a bond quote represents: a. $100 b. 1 percent of $100 c. 1 percent of $1000 d. $1000 12. Zero coupon Treasury securities are known as: 11 Chapter Two Investment Alternatives
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a. TIGERS b. LYONS c. STRAPS d. STRIPS
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This note was uploaded on 02/13/2012 for the course FINA 3480 taught by Professor Moore during the Fall '11 term at Toledo.

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QCHAPTER 2 - Chapter Two INVESTMENT ALTERNATIVES Multiple...

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