Davidson; Management - 3rd Australasian Edition



1.
All money market instruments are short-term debt.
A. True
B. False


2.
Treasury notes sold on a discount basis, with interest paid separately at maturity.
A. True
B. False


3.
Commercial banks act as dealers and are major investors in Treasury notes.
A. True
B. False


4.
For large corporations, commercial paper is more expensive but is a more assured alternative to bank borrowing.
A. True
B. False


5.
Commercial paper is more likely to be placed directly by large finance companies.
A. True
B. False


6.
Bank Accepted Bills (BAB) are used primarily for financing international trade.
A. True
B. False


7.
Consumers most often have only indirect access to the money market through commercial banks.
A. True
B. False


8.
The money market is a dealer market, not an exchange, and has no specific location.
A. True
B. False


9.
 
A. True
B. False


10.
Commercial banks are the major issuer and investor of money market securities.
A. True
B. False


11.
Dealers bring buyer and seller together; brokers make a market.
A. True
B. False


12.
Commercial banks are important indirect guarantors of commercial paper.
A. True
B. False


13.
Treasury Notes are considered to have virtually no default risk
A. True
B. False


14.
A negotiable CD is a bank deposit that can be traded in the secondary market before its maturity.
A. True
B. False


15.
Reverse repos are contracts that require a firm to first sell securities with the agreement to buy them back in a short period at a higher price.
A. True
B. False



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