U.S. government bonds are debentures.
a.True
b.False
A U.S. investor has borrowed pounds, converted them to dollars, and invested the
dollars in the United States to take advantage of interest rate differentials. To cover the
currency risk, the investor should
A.sell pounds forward.
B.buy dollars forward.
C.buy pounds forward.
D.sell pounds spot.
E.none of the options
Commercial banks are the __________________ financial intermediary in the United
States as measured by asset size.
A.largest
B.second-largest
C.third-largest
D.fourth-largest
E.fifth-largest
Refer to Figure 12-1. Given Antonio and Trina’s need for life insurance and their tight
budget, which type of life insurance should the Tysons purchase?
a. Limited-pay term life
b. Guaranteed renewable term
c. Whole life
d. Variable-universal life
In dollars outstanding in 2013, the largest money market security was
A.commercial paper.
B.banker’s acceptances.
C.T-bills.
D.Fed funds and repos.
Refer to Figure 14-2. What is Sudsy Soap’s book value?
Figure 14-2
Toni and Felix are considering buying stock. They would like to purchase 600 shares of
Sudsy Soap stock at $35 a share. Sudsy Soap had the following figures for the past
year:
NARREND
a.$600,000
b.$700,000
c.$1,500,000
d.$1,600,000
To qualify as a high-deductible health care plan, the deductible must be at least
a.$100
b.$1,000
c.$5,000
d.$10,000
Financial intermediaries (FIs) can offer savers a safer, more liquid investment than a
capital market security, even though the intermediary invests in risky illiquid
instruments because
A.FIs can diversify away some of their risk.
B.FIs closely monitor the riskiness of their assets.
C.the federal government requires them to do so.
D.FIs can diversify away some of their risk and closely monitor the riskiness of their
assets.
E.FIs can diversify away some of their risk and the federal government requires them to
do so.