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Monday, December 6, 2010
Chapter 9: Cash and Marketable Securities Management MCQs
Multiple-Choice Quiz
Chapter 9: Cash and Marketable Securities Management
Just click on the button next to each answer and you'll get immediate feedback.
1.
Marketable securities are primarily
short-term debt instruments.
short-term equity securities.
long-term debt instruments.
long-term equity securities.
2.
Time consumed in clearing a check through the banking system.
Processing float
Deposit float
Collection float
Availability float
3.
Commercial paper
is essentially
another term for a junk bond.
a short-term unsecured corporate IOU.
an intermediate-term corporate bond.
a certificate that may be exchanged for a share of common stock at a specified future date.
4.
Concentration banking
increases idle balances.
moves excess funds from a concentration bank to regional banks.
is less important during periods of rising interest rates.
improves control over corporate cash.
5.
Which would be an appropriate investment for temporarily idle corporate cash that will be used to pay quarterly dividends three months from now?
A long- term Aaa-rated corporate bond with a current annual yield of 9.4 percent.
A 30- year Treasury bond with a current annual yield of 8.7 percent.
Ninety- day commercial paper with a current annual yield of 6.2 percent.
Common stock that has been appreciating in price 8 percent annually, on average, and
paying a quarterly dividend that is the equivalent of a 5 percent annual yield.
6.
Which of the following marketable securities is the obligation of a commercial bank?
Commercial paper
Negotiable certificate of deposit
Repurchase agreement
T-bills
7.
The movement of business data electronically in a structured, computer-readable format.
EFT
EDI
SWIFT
CHIPS
8.
That portion of a firm's total marketable securities portfolio held to take care of probable deficiencies in the firm's cash account.
Free cash segment
Controllable cash segment
Ready cash segment
None of the above
9.
The most basic requirement for a firm's marketable securities.
Safety
Yield
Marketability
New York.
10.
A non-negotiable check payable to a company account at a concentration bank
Payable through draft (PTD)
Depository transfer check (DTC)
ACH transfer
Repo
11.
According to the Bond Equivalent Yield (BEY) method, the yield on a $1,000, 13-week US Treasury bill purchased for $960 would be closest to
.
16.0 percent
16.7 percent
CORRECT!
[($1,000 - $960) / $960] x [365 / 91] = 0.167
17.0 percent
17.8 percent
The following items are NEW to the 13th edition.
12.
US Treasury bills are now sold in minimum amounts of
and multiples of
above the minimum.
$10,000; $10,000
$10,000; $1,000
$1,000; $1,000
$1,000; $100
$100; $100
13.
Accounts receivable conversion (a.k.a., check conversion) is the conversion of a paper check to
.
an electronic check image
a "substitute check"
an ACH debit transaction
a foreign currency
14.
The US Federal National Mortgage Association (FNMA, "Fannie Mae") and the US Federal Home Loan Mortgage Corporation (FHLMC, "Freddie Mac") are
. Interest and principal on debt securities that they issue
explicity guaranteed by the US government.
federal agencies; are
federal agencies; are not
government sponsored entities (GSEs); are
government sponsored enterprises (GSEs); are not
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