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11. Give examples of money market instruments.
Ex: commercial paper, a negotiable CD, treasury bills, repurchase agreements, etc…
12. Give examples of capital
Ex: U.S government agency securities, corporate bonds, State and local government
bonds, etc…
13. Why is a share of Microsoft common stock an asset for its owner and a
liability for Microsoft?
Because Microsoft receive money by selling stock. The owner purchase stock and
stock will give their benefits in the future.
14. Suppose you invested in a firm (for example, Apple, Google, Western
Union) when it was small and unprofitable. Now the firm has grown
considerably and it is profitable. Would you be better off if you had bought
the firm’s stock or the firm’s bonds?
Stock: Yes, because I will receive dividend and my stock have had higher value.
Bond: No, because I just make a loans to these company and I will be given back my
