Question 1

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

Accepted Answer

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

Question 2

The purchase and sale of Treasury bills before their maturity takes place in the ________ with the assistance of a brokerage firm.

Accepted Answer

The answer of The purchase and sale of Treasury bills...

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Certificates of deposit are highly liquid and pay the highest investment returns.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not a good,short-term money market investment?

Accepted Answer

A) NOW account 
B) Savings account 
C) AT&T common stock 
D) Treasury bills 
A) NOW account 
B) Savings account 
C) AT&T common stock 
D) Treasury bills

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Generally,yields are ________ for securities that are exposed to ________ liquidity risk.

Accepted Answer

A) higher; more 
B) higher; less 
C) lower; less 
D) Both A and C are correct. 
A) higher; more 
B) higher; less 
C) lower; less 
D) Both A and C are correct.

Question 8

All of the following are true of Treasury securities except they

Accepted Answer

A) are a means by which the U.S.government lends money. 
B) have a maturity range from 3 months to 30 years. 
C) have a minimum par value of $100. 
D) can be bought and sold on the secondary market. 
A) are a means by which the U.S.government lends money. 
B) have a maturity range from 3 months to 30 years. 
C) have a minimum par value of $100. 
D) can be bought and sold on the secondary market.

Question 9

Which of the following is not an advantage of a checking account?

Accepted Answer

A) Stop payment services 
B) Overdraft protection 
C) Interest earned on balances 
D) Liquidity 
A) Stop payment services 
B) Overdraft protection 
C) Interest earned on balances 
D) Liquidity

Question 10

The market where an investor could sell T-bills that he owns is called the

Accepted Answer

A) primary market. 
B) secondary market. 
C) stock market. 
D) T-bill market. 
A) primary market. 
B) secondary market. 
C) stock market. 
D) T-bill market.

Question 11

Good cash management requires some liquidity,but excessive liquidity has an opportunity cost.

Accepted Answer

A) True 
 B)False

Question 12

Describe three types of risk associated with various money market instruments.

Accepted Answer

1.Credit risk-the risk that a borrower m

Question 13

Money management has no relationship to the personal cash flow statement.

Accepted Answer

A) True 
 B)False

Question 14

________ risk is the potential loss of 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 15

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 16

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

Accepted Answer

A) it pays a higher interest rate. 
B) MMDA accounts are less liquid. 
C) it provides more limited checking services. 
D) MMDA accounts must maintain a larger balance. 
A) it pays a higher interest rate. 
B) MMDA accounts are less liquid. 
C) it provides more limited checking services. 
D) MMDA accounts must maintain a larger balance.

Question 17

Which of the following does money management not involve?

Accepted Answer

A) A series of decisions 
B) A long-term time period 
C) Cash inflows 
D) Cash outflows 
A) A series of decisions 
B) A long-term time period 
C) Cash inflows 
D) Cash outflows

Question 18

Describe the type of checking account you have or plan to have.List the advantages and disadvantages of your choice.

Accepted Answer

Advantages can include no fees

Question 19

Stopping payment on a check

Accepted Answer

A) is possible after the check clears in cases of disputes. 
B) can only be used if the check has not cleared. 
C) is free if your checkbook is lost or stolen. 
D) is encouraged by most banks as a customer service. 
A) is possible after the check clears in cases of disputes. 
B) can only be used if the check has not cleared. 
C) is free if your checkbook is lost or stolen. 
D) is encouraged by most banks as a customer service.

Question 20

If you lose your checkbook,the bank will not charge you for stopping payment on any unused blank checks.

Accepted Answer

A) True 
 B)False

Exam 6: Managing Your Money

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

The purchase and sale of Treasury bills before their maturity takes place in the ________ with the assistance of a brokerage firm.

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

Certificates of deposit are highly liquid and pay the highest investment returns.

Which of the following is not a good,short-term money market investment?

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

Generally,yields are ________ for securities that are exposed to ________ liquidity risk.

All of the following are true of Treasury securities except they

Which of the following is not an advantage of a checking account?

The market where an investor could sell T-bills that he owns is called the

Good cash management requires some liquidity,but excessive liquidity has an opportunity cost.

Describe three types of risk associated with various money market instruments.

Money management has no relationship to the personal cash flow statement.

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

When purchasing a certificate of deposit (CD)

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

Which of the following does money management not involve?

Describe the type of checking account you have or plan to have.List the advantages and disadvantages of your choice.

Stopping payment on a check

If you lose your checkbook,the bank will not charge you for stopping payment on any unused blank checks.

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

Generally,yields are for securities that are exposed to liquidity risk.