Exam 2: Asset Classes and Financial Instruments

Which of the following statement(s) is (are) true regarding municipal bonds?I) A municipal bond is a debt obligation issued by state or local governments.II) A municipal bond is a debt obligation issued by the federal government.III) The interest income from a municipal bond is exempt from federal income taxation.IV) The interest income from a municipal bond is exempt from state and local taxation in the issuing state.

The ____ index represents the performance of the Hong Kong stock market.

A 5.5%, 20-year municipal bond is currently priced to yield 7.2%. For a taxpayer in the 33% marginal tax bracket, this bond would offer an equivalent taxable yield of

Consider the following three stocks: Stock Price Number of shares outstanding Stock A \ 40 200 Stock B \ 70 500 Stock C \ 10 600 Assume at these prices that the value-weighted index constructed with the three stocks is 490. What would the index be if stock B is split 2 for 1 and stock C 4 for 1?

For a taxpayer in the 12% marginal tax bracket, a 15-year municipal bond currently yielding 6.2% would offer an equivalent taxable yield of

Freddie Mac and Ginnie Mae were organized to provide

The Dow Jones Industrial Average (DJIA) is computed by

The index that includes the largest number of actively-traded stocks is

The maximum maturity of commercial paper that can be issued without SEC registration is

A municipal bond issued to finance an airport, hospital, turnpike, or port authority is typically a

Deposits of commercial banks at the Federal Reserve Bank are called

Corporations can exclude ____________% of the dividends received from preferred stock from taxes.

Brokers' calls

Treasury Inflation-Protected Securities (TIPS)

You purchased a futures contract on corn at a futures price of 331, and at the time of expiration, the price was 343. What was your profit or loss?

A corporate bond is listed in the Wall Street Journal and shows an ask price of 98.62. If the corporate bonds have a par value of $1,000, what dollar amount should a buyer expect to pay?

You sold a futures contract on corn at a futures price of 331, and at the time of expiration, the price was 343. What was your profit or loss?

In the event of the firm's bankruptcy,

With regard to a futures contract, the short position is held by

Which of the following statements regarding the Dow Jones Industrial Average (DJIA) is false?