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Question 1 of 10
1. Question
Identify the companies which provide the ratings of financial strength:
I. Moody’s
II. Fitch
III. NAIC Watchlist
IV. WeissCorrect
These five companies provide the best ratings of financial strength: A.M. Best; Fitch; Moody’s; Standard and Poor’s; and Weiss.
Incorrect
These five companies provide the best ratings of financial strength: A.M. Best; Fitch; Moody’s; Standard and Poor’s; and Weiss.
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Question 2 of 10
2. Question
Identify the factors on which the ratings of financial strength are based:
I. Underwriting results
II. Soundness of investment
III. Adequacy of policyholder’s surplus to absorb shocks
IV. Inadequacy of reserves for undischarged liabilitiesCorrect
These five companies provide the best ratings of financial strength: A.M. Best; Fitch; Moody’s; Standard and Poor’s; and Weiss. These ratings are typically based on underwriting results, economy of management, adequacy of reserves for undischarged liabilities, adequacy of policyholder’s surplus to absorb shocks, and the soundness of investments.
Incorrect
These five companies provide the best ratings of financial strength: A.M. Best; Fitch; Moody’s; Standard and Poor’s; and Weiss. These ratings are typically based on underwriting results, economy of management, adequacy of reserves for undischarged liabilities, adequacy of policyholder’s surplus to absorb shocks, and the soundness of investments.
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Question 3 of 10
3. Question
Time deposits with specified dates of maturity are called?
Correct
Certificates of deposit, also known as CDs, are time deposits with specified dates of maturity. A certificate of deposit may be either negotiable or nonnegotiable.
Incorrect
Certificates of deposit, also known as CDs, are time deposits with specified dates of maturity. A certificate of deposit may be either negotiable or nonnegotiable.
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Question 4 of 10
4. Question
What is the amount for the non-negotiable CDs?
Correct
The maturities on these tend to be up to one year; for the most part, certificates of deposit of less than $100,000 are nonnegotiable.
Incorrect
The maturities on these tend to be up to one year; for the most part, certificates of deposit of less than $100,000 are nonnegotiable.
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Question 5 of 10
5. Question
What is the maturity period for US Treasury bills?
Correct
US Treasury bills are issued by the federal government and are sold in denominations of $1,000 to $1,000,000 and have maturity periods of three to twelve months. These treasury bills are usually sold at a discount.
Incorrect
US Treasury bills are issued by the federal government and are sold in denominations of $1,000 to $1,000,000 and have maturity periods of three to twelve months. These treasury bills are usually sold at a discount.
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Question 6 of 10
6. Question
The interest acquired through the US Treasury bills is subjected to which type of tax?
Correct
US Treasury bills are issued by the federal government and are sold in denominations of $1,000 to $1,000,000 and have maturity periods of three to twelve months. These treasury bills are usually sold at a discount. The interest acquired through them is subject to federal income tax, but not state or local tax.
Incorrect
US Treasury bills are issued by the federal government and are sold in denominations of $1,000 to $1,000,000 and have maturity periods of three to twelve months. These treasury bills are usually sold at a discount. The interest acquired through them is subject to federal income tax, but not state or local tax.
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Question 7 of 10
7. Question
Name the unsecured short-term promissory notes that are issued by corporations.
Correct
Commercial paper is the unsecured short-term promissory notes that are issued by corporations. There is a small risk of default on these, because only firms with excellent credit ratings are allowed to issue them.
Incorrect
Commercial paper is the unsecured short-term promissory notes that are issued by corporations. There is a small risk of default on these, because only firms with excellent credit ratings are allowed to issue them.
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Question 8 of 10
8. Question
Identify the short term investment vehicles:
I. Treasury notes
II. Commercial paper
III. Certificate of deposits
IV. Treasury BillsCorrect
Treasury notes are sold in denominations ranging from $1,000 to $1,000,000 and have maturity periods of between 2 and ten years. Treasury bonds are the government’s long-term debt; they have maturity periods longer than ten years.
Incorrect
Treasury notes are sold in denominations ranging from $1,000 to $1,000,000 and have maturity periods of between 2 and ten years. Treasury bonds are the government’s long-term debt; they have maturity periods longer than ten years.
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Question 9 of 10
9. Question
Identify the kinds of US savings bonds:
I. Series E
II. Series EE
III. Series F
IV. Series FFCorrect
There are a few kinds of US government savings bonds. The Series E bond was established to encourage more saving; it was offered in small denominations, at a discount, and paid no interest. The Series EE bond replaced the Series E, adding a variable rate of interest that allowed investors to benefit from rising interest rates. The interest on E and EE bonds is not taxable until they either reach maturity or are cashed in.
Incorrect
There are a few kinds of US government savings bonds. The Series E bond was established to encourage more saving; it was offered in small denominations, at a discount, and paid no interest. The Series EE bond replaced the Series E, adding a variable rate of interest that allowed investors to benefit from rising interest rates. The interest on E and EE bonds is not taxable until they either reach maturity or are cashed in.
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Question 10 of 10
10. Question
Securities that are issued by the federal government and have coupon payments that periodically adjust to changes in the inflation rate are called:
Correct
Treasury inflation-protected securities are issued by the federal government and have coupon payments that periodically adjust to changes in the inflation rate. These changes in inflation are represented in the principal rather than the coupon.
Incorrect
Treasury inflation-protected securities are issued by the federal government and have coupon payments that periodically adjust to changes in the inflation rate. These changes in inflation are represented in the principal rather than the coupon.