Exam 6: Managing Your Money

You have a choice between investing $10,000 in a CD that in six months will pay you $10,190 or investing $9,800 in a T-bill that in 182 days will return $10,000.Ignoring any opportunity cost between the two investments,which will give you the higher annualized return and what will the annualized return be? (a)T-bill; 2 percent (b)T-bill; 4.01 percent (c)CD; 3.8 percent (d)CD; 1.9 percent

To achieve both liquidity and an adequate return,you should consider investing in only one money market investment with a fixed interest rate and a long maturity date.

Generally,savings account yields are ________ than certificates of deposit that are exposed to ________ liquidity risk.

Which of the following affords you access to a "sweep account"?

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?

CDs that have small denominations (such as $10,000 or less)are sometimes referred to as retail CDs because they are more attractive to individuals than to firms.

Which of the following is not true about a certificate of deposit (CD)?

Maurice purchased a $10,000,90-day CD that pays 8 percent.How much will Maurice receive when the CD matures? (Round answer to the nearest dollar.)

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

To calculate interest earned,multiply the deposit amount times the annual interest rate times the adjustment for the investment period.