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Question 1 of 10
1. Question
A broker who deals only with other municipal brokers, and large financial institutions, such as banks is known as:
I. Government agency broker
II. Corporate brokers
III. Municipal broker
IV. Broker’s brokerCorrect
Some municipal bond brokers don’t deal with individual investors or the general public at all .They deal only with other municipal brokers, and large financial institutions, such as banks. A broker in this category is known as a broker’s broker
Incorrect
Some municipal bond brokers don’t deal with individual investors or the general public at all .They deal only with other municipal brokers, and large financial institutions, such as banks. A broker in this category is known as a broker’s broker
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Question 2 of 10
2. Question
Which of the following bonds are issued by corporations?
I. high-yield bonds
II. Government agency bonds
III. Repurchase agreement bonds
IV. Certificates of deposit bondsCorrect
Corporate bonds are bonds issued by corporations. Whereas Treasury bonds can be backed by the full faith and credit of the U.S. government, corporations do not have that guarantee, and thus generally have higher interest rates.
Incorrect
Corporate bonds are bonds issued by corporations. Whereas Treasury bonds can be backed by the full faith and credit of the U.S. government, corporations do not have that guarantee, and thus generally have higher interest rates.
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Question 3 of 10
3. Question
Which of the following bonds are called “junk bonds”?
I. Corporate bonds
II. high-yield bonds
III. Certificates of deposit
IV. Government agency bondsCorrect
high-yield bonds are bonds with lower credit ratings than usual corporate bonds (below a “BBB” S&P rating and below a “Baa” Moody’s rating). These are called “junk bonds,”although they are still popular among investors worldwide
Incorrect
high-yield bonds are bonds with lower credit ratings than usual corporate bonds (below a “BBB” S&P rating and below a “Baa” Moody’s rating). These are called “junk bonds,”although they are still popular among investors worldwide
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Question 4 of 10
4. Question
Which of the following is(are) the type(s) of commercial paper?
I. Direct paper
II. Dealer paper
III. Brokered paper
IV. Jumbo CDsCorrect
Direct paper is sold directly by the financing institution to the public, without going through dealers. Dealer paper is any commercial paper marketed through dealers.
(i) Direct paper (ii) Dealer paper
Incorrect
Direct paper is sold directly by the financing institution to the public, without going through dealers. Dealer paper is any commercial paper marketed through dealers.
(i) Direct paper (ii) Dealer paper
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Question 5 of 10
5. Question
A financial instrument offered by banks, having a specific term (such as six months or one year) and usually having a fixed interest rate is known as:
I. Certificates of deposit (CDs)
II. Brokered certificates of deposit
III. Jumbo certificates of deposit
IV. Banker’s acceptanceCorrect
Certificates of deposit (CDs) are financial instruments offered by banks, having a specific term (Such as six months or one year) and usually having a fixed interest rate.
Incorrect
Certificates of deposit (CDs) are financial instruments offered by banks, having a specific term (Such as six months or one year) and usually having a fixed interest rate.
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Question 6 of 10
6. Question
The following certificate(s) is(are) not purchased directly from a bank, but instead mediated by a brokerage firm?
I. Jumbo certificates of deposit
II. Certificates of deposit (CDs)
III. Auction-rate securities
IV. Brokered certificates of depositCorrect
Brokered certificates of deposit are CDs which are not purchased directly from a bank, but instead mediated by a brokerage firm (or from some other entity besides a bank). These CDs are generally pricier.
Incorrect
Brokered certificates of deposit are CDs which are not purchased directly from a bank, but instead mediated by a brokerage firm (or from some other entity besides a bank). These CDs are generally pricier.
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Question 7 of 10
7. Question
Which of the following statement is true for Jumbo certificates of deposit?
I. Usually, have a fixed interest rate
II. They are not purchased directly from a bank
III. They have a minimum face value of $100,000
IV. They are considered to be low-risk.Correct
Jumbo certificates of deposit are CDs with a minimum face value of $100,000. These are, of course, Ordinarily purchased only by large institutional investors and they are considered to be low-risk
Incorrect
Jumbo certificates of deposit are CDs with a minimum face value of $100,000. These are, of course, Ordinarily purchased only by large institutional investors and they are considered to be low-risk
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Question 8 of 10
8. Question
Which of the following is commonly used in international transactions?
I. Auction-rate securities
II. Asset-backed securities
III. Banker’s acceptance
IV. Equity-linked securitiesCorrect
A banker’s acceptance (BA) is commonly used in international transactions. It is the corporate equivalent of a post-dated check, and can have limits of 1 to 270 days. A banker’s acceptance is better than a regular postdated check, however, because the holder has the goods being traded as collateral in case the bank underwriting the acceptance goes under
Incorrect
A banker’s acceptance (BA) is commonly used in international transactions. It is the corporate equivalent of a post-dated check, and can have limits of 1 to 270 days. A banker’s acceptance is better than a regular postdated check, however, because the holder has the goods being traded as collateral in case the bank underwriting the acceptance goes under
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Question 9 of 10
9. Question
Which of the following securities is backed with some sort of asset as collateral?
I. Equity-linked securities
II. Exchange-traded notes
III. Holding company depository receipts
IV. Asset-backed securitiesCorrect
Asset-backed securities (ABSs) are securities which are backed with some sort of asset as collateral. Asset-backed securities (ABSs) are securities which are backed with some sort of asset as collateral.
Incorrect
Asset-backed securities (ABSs) are securities which are backed with some sort of asset as collateral. Asset-backed securities (ABSs) are securities which are backed with some sort of asset as collateral.
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Question 10 of 10
10. Question
Which of the following statement is not true related to Equity-linked securities?
I. Partly involving debt
II. Partly involving equity
III. A mixture of bonds and exchange-traded funds
IV. Printed on a single stock certificateCorrect
Equity-linked securities (ELKSs) are hybrid securities, partly involving debt and partly involving equity. Fundamentally, they are debt securities which will behave like normal debt securities if a specified stock maintains a specific level of performance, but if that stock drops below the minimum
performance level, then the investor receives an amount of stock instead.Incorrect
Equity-linked securities (ELKSs) are hybrid securities, partly involving debt and partly involving equity. Fundamentally, they are debt securities which will behave like normal debt securities if a specified stock maintains a specific level of performance, but if that stock drops below the minimum
performance level, then the investor receives an amount of stock instead.