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Exam 2: Financial Markets, Asset Classes and Financial Instruments

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Question 31

Multiple Choice

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If a Treasury note has a bid price of $995, the quoted bid price in the Wall Street Journal would be

A) 99:50.
B) 99:16.
C) 99:80.
D) 99:24.

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Question 32

Multiple Choice

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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.

A) I and II only
B) I and III only
C) I, II, and III only
D) I, III, and IV only

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Question 33

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Which of the following is not a mortgage-related government or government-sponsored agency?

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

You purchased a futures contract on corn at a futures price of 3.31, and at the time of expiration, the price was 3.43.What was your profit or loss?

The ultimate stock index in the U.S.is the

The ____ index represents the performance of the Japanese stock market.

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

Certificates of deposit are insured for up to ____________ in the event of bank insolvency.

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

A form of short-term borrowing by dealers in government securities is (are)

Suppose an investor is considering a corporate bond with a 7.17% before-tax yield and a municipal bond with a 5.93% before-tax yield.At what marginal tax rate would the investor be indifferent between investing in the corporate and investing in the muni?

Which of the following is not a characteristic of a money market instrument?

The money market is a subsector of the

Consider the following three stocks: The value-weighted index constructed with the three stocks using a divisor of 100 is

A U.S.dollar-denominated bond that is sold in Singapore is a(n)

The largest component of the money market is/are

Which of the following indices is(are) market-value weighted? I) The New York Stock Exchange Composite Index II) The S&P/TSX Composite Index III) The Dow Jones Industrial Average

In order for you to be indifferent between the after-tax returns on a corporate bond paying 7% and a tax-exempt municipal bond paying 5.5%, what would your tax bracket need to be?

Which of the following is not a component of the money market?