Exam 6: Managing Your Money

Money market funds (MMFs) offer all of the following, except

You should attempt to have a sufficient amount of funds in liquid assets to draw on when your cash outflows exceed your cash inflows.

Because of the active secondary market for Treasury bonds, one risk that a corporate bond is less likely to expose you to is

Kelly deposits $1,000 in her savings account earning 4% per year. How much interest would she earn in a year?

Generally, short-term debt securities issued by large corporations, also known as commercial paper, offer a slightly higher return than Treasury bills.

Risk management of money market investments involves assessing the risk exhibited by the investment.

Liquidity is necessary because there are times during the year when your cash inflows are not adequate to cover your cash outflows.

You buy a T-bill, which has a par value of $10,000 for $9,600 and the T-bill has a one-year maturity. What will be your return?

A money market deposit account (MMDA) requires a minimum balance, pays interest, and allows a limited number of checks to be written each month.

An asset management account that moves any unused balance in the brokerage account into a money market investment at the end of each business day is called a(n)

Treasury bills (T-bills) are Treasury securities with maturities of one year or less.

Checking accounts may offer all of the following, except

All of the following are true of money market deposit accounts (MMDAs), except

An advantage of a NOW account over a traditional checking account is that your money is more readily available to you.

Because most regular checking accounts do not pay interest, you should keep only enough funds in your account to cover anticipated expenses with a small reserve for unanticipated expenses.

The allocation of funds between liquid investments and less liquid, higher earning investments depends on

If a bank provides overdraft protection at a rate of 12% for each $100 (or portion of $100) borrowed when an overdraft occurs, what amount of interest would a customer pay for a $188 overdraft?

In general, the more liquid an asset, the higher its return.

Money management is a series of decisions made over a short-term period regarding cash inflows and outflows.

Use the following two columns of items to answer the matching questions below: -liquidity 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