Question 1

Money market funds invest mainly in ________, which consists of short-term debt securities issued by large corporations.

Accepted Answer

The answer of Money market funds invest mainly in ________,...

Question 2

Treasury bills are more liquid than CDs because there is a secondary market for T-bills.

Accepted Answer

A) True 
 B)False

Question 3

In comparing an MMDA to a NOW account, the MMDA does all of the following, except

Accepted Answer

A)  the MMDA pays a higher interest rate. 
B)  the MMDA has a maturity date whereas a NOW account does not. 
C)  the MMDA provides more limited checking services. 
D)  the MMDA is less liquid. 
A)  the MMDA pays a higher interest rate. 
B)  the MMDA has a maturity date whereas a NOW account does not. 
C)  the MMDA provides more limited checking services. 
D)  the MMDA is less liquid.

Question 4

Which of the following should not be considered when evaluating a checking account?

Accepted Answer

A)  Whether overdraft protection is available and the cost of that protection 
B)  The cost of a stop payment order 
C)  The fees charged monthly 
D)  Whether the account is insured for more than $250,000 
A)  Whether overdraft protection is available and the cost of that protection 
B)  The cost of a stop payment order 
C)  The fees charged monthly 
D)  Whether the account is insured for more than $250,000

Question 5

Kayla deposits $1,500 into a NOW account that requires a minimum balance of $500 and offers an interest rate of 2.4%. How much interest will she earn in one year in the NOW account?

Accepted Answer

A)  $360 
B)  $24 
C)  $12 
D)  $36 
A)  $360 
B)  $24 
C)  $12 
D)  $36

Question 6

An asset management account combines deposit accounts with a brokerage account and provides a single account statement.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following items will usually give you the highest return?

Accepted Answer

A)  One-year CD 
B)  Savings account 
C)  NOW account 
D)  Checking account 
A)  One-year CD 
B)  Savings account 
C)  NOW account 
D)  Checking account

Question 8

All of the following money market securities are insulated from credit risk, except

Accepted Answer

A)  Treasury securities. 
B)  bank deposits. 
C)  commercial paper. 
D)  CDs. 
A)  Treasury securities. 
B)  bank deposits. 
C)  commercial paper. 
D)  CDs.

Question 9

When purchasing a certificate of deposit (CD),

Accepted Answer

A)  you are always better off to buy the longer-term CDs. 
B)  you will earn more interest percentage-wise on the lower dollar CDs. 
C)  the amount you invest is at risk, so choose carefully. 
D)  it is wise to shop around as rates vary among financial institutions. 
A)  you are always better off to buy the longer-term CDs. 
B)  you will earn more interest percentage-wise on the lower dollar CDs. 
C)  the amount you invest is at risk, so choose carefully. 
D)  it is wise to shop around as rates vary among financial institutions.

Question 10

Which of the following is not true about certificates of deposit (CDs)?

Accepted Answer

A)  They pay higher interest than T-bills. 
B)  They are long-term investments of two years or more. 
C)  Funds are locked in for specific periods of time. 
D)  A penalty is imposed for early withdrawal. 
A)  They pay higher interest than T-bills. 
B)  They are long-term investments of two years or more. 
C)  Funds are locked in for specific periods of time. 
D)  A penalty is imposed for early withdrawal.

Question 11

Liquidity refers to your ability to cover any long-term cash deficiencies.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following securities is likely to have the most credit risk?

Accepted Answer

A)  Commercial paper 
B)  A high yield (junk) bond 
C)  Collateralized mortgage bond consisting of 50% sub-prime mortgages 
D)  There is not enough information to decide between A, B and C. 
A)  Commercial paper 
B)  A high yield (junk) bond 
C)  Collateralized mortgage bond consisting of 50% sub-prime mortgages 
D)  There is not enough information to decide between A, B and C.

Question 13

To achieve both liquidity and an adequate return, you should consider investing in

Accepted Answer

A)  only one money market investment with a high return and low liquidity. 
B)  only one money market investment with low return and high liquidity. 
C)  money market investments plus other investments with varied returns and levels of liquidity. 
D)  multiple money market investments with high returns and high liquidity. 
A)  only one money market investment with a high return and low liquidity. 
B)  only one money market investment with low return and high liquidity. 
C)  money market investments plus other investments with varied returns and levels of liquidity. 
D)  multiple money market investments with high returns and high liquidity.

Question 14

Risk management of money market investments involves all of the following, except

Accepted Answer

A)  credit risk. 
B)  interest rate risk. 
C)  potential for default when backed by the federal government. 
D)  liquidity risk. 
A)  credit risk. 
B)  interest rate risk. 
C)  potential for default when backed by the federal government. 
D)  liquidity risk.

Question 15

An asset management account does all of the following, except

Accepted Answer

A)  combines deposit accounts with a brokerage account that is used to buy or sell stocks. 
B)  provides a single consolidated statement showing the ending balance and activity of all accounts. 
C)  requires a small initial investment to start. 
D)  sweeps any unused balance in the brokerage account into a money market account at the end of the day. 
A)  combines deposit accounts with a brokerage account that is used to buy or sell stocks. 
B)  provides a single consolidated statement showing the ending balance and activity of all accounts. 
C)  requires a small initial investment to start. 
D)  sweeps any unused balance in the brokerage account into a money market account at the end of the day.

Question 16

An asset management account combines

Accepted Answer

A)  assets and expenses. 
B)  deposit accounts with a brokerage account. 
C)  a savings account with a brokerage account. 
D)  a savings account with long-term investments. 
A)  assets and expenses. 
B)  deposit accounts with a brokerage account. 
C)  a savings account with a brokerage account. 
D)  a savings account with long-term investments.

Question 17

________ risk is the potential loss from converting an investment into cash.

Accepted Answer

A)  Credit 
B)  Interest rate 
C)  Liquidity 
D)  Asset 
A)  Credit 
B)  Interest rate 
C)  Liquidity 
D)  Asset

Question 18

Since the potential for default is very low for some types of money market securities, it's not necessary to assess the risk before investing your money in one.

Accepted Answer

A) True 
 B)False

Question 19

Use the following two columns of items to answer the matching questions below:
-asset management account
A)a financial institution's notice that it will not honor a check
B)an account that combines deposit accounts and a brokerage account
C)the risk that the borrower may not repay on a timely basis
D)a market where existing securities are bought and sold
E)a short-term loan from the bank to cover a cash deficiency in a checking account
F)a type of deposit that provides checking services and pays interest
G)Treasury securities with maturities of one year or less

Accepted Answer

The answer of Use the following two columns of items...

Question 20

Use the following two columns of items to answer the matching questions below:
-money management
A)ability to cover cash deficiencies
B)a series of decisions made over a short-term period regarding cash inflows and outflows
C)cash outflows are more than inflows

Accepted Answer

The answer of Use the following two columns of items...

Money market funds invest mainly in ________, which consists of short-term debt securities issued by large corporations.

Treasury bills are more liquid than CDs because there is a secondary market for T-bills.

In comparing an MMDA to a NOW account, the MMDA does all of the following, except

Which of the following should not be considered when evaluating a checking account?

Kayla deposits $1,500 into a NOW account that requires a minimum balance of $500 and offers an interest rate of 2.4%. How much interest will she earn in one year in the NOW account?

An asset management account combines deposit accounts with a brokerage account and provides a single account statement.

Which of the following items will usually give you the highest return?

All of the following money market securities are insulated from credit risk, except

When purchasing a certificate of deposit (CD),

Which of the following is not true about certificates of deposit (CDs)?

Liquidity refers to your ability to cover any long-term cash deficiencies.

Which of the following securities is likely to have the most credit risk?

To achieve both liquidity and an adequate return, you should consider investing in

Risk management of money market investments involves all of the following, except

An asset management account does all of the following, except

An asset management account combines

________ risk is the potential loss from converting an investment into cash.

Since the potential for default is very low for some types of money market securities, it's not necessary to assess the risk before investing your money in one.

Use the following two columns of items to answer the matching questions below: -money management A)ability to cover cash deficiencies B)a series of decisions made over a short-term period regarding cash inflows and outflows C)cash outflows are more than inflows

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Exam 6: Managing Your Money

Money market funds invest mainly in ________, which consists of short-term debt securities issued by large corporations.

Treasury bills are more liquid than CDs because there is a secondary market for T-bills.

In comparing an MMDA to a NOW account, the MMDA does all of the following, except

Which of the following should not be considered when evaluating a checking account?

Kayla deposits $1,500 into a NOW account that requires a minimum balance of $500 and offers an interest rate of 2.4%. How much interest will she earn in one year in the NOW account?

An asset management account combines deposit accounts with a brokerage account and provides a single account statement.

Which of the following items will usually give you the highest return?

All of the following money market securities are insulated from credit risk, except

When purchasing a certificate of deposit (CD),

Which of the following is not true about certificates of deposit (CDs)?

Liquidity refers to your ability to cover any long-term cash deficiencies.

Which of the following securities is likely to have the most credit risk?

To achieve both liquidity and an adequate return, you should consider investing in

Risk management of money market investments involves all of the following, except

An asset management account does all of the following, except

An asset management account combines

________ risk is the potential loss from converting an investment into cash.

Since the potential for default is very low for some types of money market securities, it's not necessary to assess the risk before investing your money in one.

Use the following two columns of items to answer the matching questions below: -money management A)ability to cover cash deficiencies B)a series of decisions made over a short-term period regarding cash inflows and outflows C)cash outflows are more than inflows

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters