Exam 6: Managing Your Money

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

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

Which of the following is not a money market investment?

________ risk is the risk that a borrower may not repay on a timely basis.

For relatively safe investments such as savings accounts,CDs,MMDAs,and T-bills,liquidity is rarely a concern.

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

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

Which of the following accounts would tend to give you the higher interest combined with ease of access to your funds on a limited basis?

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

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

Overdraft protection for a checking account is a low-cost short-term loan.

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

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

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

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

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

Describe the relationship between return and liquidity using a one-year CD and a checking account to illustrate.

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

A(n)________ account acts as a traditional checking account except that it pays interest.

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