IS 104: Financial Management Week 13 Quiz

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What is the primary purpose of money market instruments?

To obtain long-term funds

To raise funds for investments

To obtain short-term funds (correct)

To issue government securities

What is the primary characteristic of a Certificate of Deposit (CD)?

It is a type of equity security

It has a definite maturity date and a definite rate of interest (correct)

It is a type of promissory note

It is a type of mutual fund

What is the characteristic of Cash Management Bills?

They are issued by companies

They have maturities of more than 1 year

They have maturities of less than 91 days (correct)

They are not backed by the government

What is the main purpose of a Repurchase Agreement (RP)?

To sell securities with a promise to repurchase at a specified date and price Signup and view all the answers

What is the function of Banker's Acceptance?

To help traders raise funds to pay for current expenditures Signup and view all the answers

What is the backing of Treasury Bills?

The full taxing power of the government Signup and view all the answers

What is the primary benefit of a Money Market Deposit Account (MMDA)?

It offers a higher rate of interest than ordinary bank savings accounts Signup and view all the answers

What is the primary characteristic of an Exchange-Traded Fund (ETF)?

It is traded on a stock exchange Signup and view all the answers

What do Commercial Papers represent?

IOUs issued by companies to finance short-term needs Signup and view all the answers

What is the general issuer of government securities?

The National Treasury Signup and view all the answers

What is the purpose of a Certificate of Assignment?

To transfer the right of the seller over a security to the buyer Signup and view all the answers

What is the primary characteristic of Capital Market Instruments?

They are either equity or debt securities Signup and view all the answers

IS 104: Financial Management Week 13 Quiz

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Questions and Answers

What is the primary purpose of money market instruments?

What is the primary characteristic of a Certificate of Deposit (CD)?

What is the characteristic of Cash Management Bills?

What is the main purpose of a Repurchase Agreement (RP)?

What is the function of Banker's Acceptance?

What is the backing of Treasury Bills?

What is the primary benefit of a Money Market Deposit Account (MMDA)?

What is the primary characteristic of an Exchange-Traded Fund (ETF)?

What do Commercial Papers represent?

What is the general issuer of government securities?

What is the purpose of a Certificate of Assignment?

What is the primary characteristic of Capital Market Instruments?

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