Financial Instruments Paper 10

1

All of the following are alternative marketable securities suitable for investment except






2

Which security is most often held as a substitute for cash?






3

Obligations issued by federal agencies other than the U.S. Treasury Department are






4

Assuming a 360-day year, the current price of a $100 U.S. Treasury bill due in 180 days on a 6% discount basis is






5

Short-term securities issued by the Federal Housing Administration are known as






6

Which one of the following instruments would be least appropriate for a corporate treasurer to utilize for temporary investment of cash?






7

Which one of the following statements best characterizes U.S. Treasury bills?






8

The Duoplan Company is determining the most appropriate source of short-term funding. Trade credit terms from suppliers are 2/30, net 90. The rate for borrowing at the bank is 12%. The company has also been approached by an investment banker offering to issue Duoplan’s commercial paper. The commercial paper would be issued quarterly in increments of $9.1 million with net proceeds of $8.8 million. Which option should the firm select?






9

Which of the following financial instruments can be traded in international money markets?






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