Test your knowledge

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When you open a certificate of deposit, how long are you expected to leave your money there?

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For as long as you want

For one year

For a specific term

For a specific term. CDs are meant to hold money for a specific term, such as a month, six months, a year, etc. You are expected to leave your money deposited during that time.

You can buy a savings bond for as little as _______.

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$10

$25

$50

$25. This is the minimum amount; it increases by the penny.

When a bondholder may redeem a bond before it matures, the privilege must be set down in a ________.

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Call provision

Put provision

Convertibility provision

Put provision. To "put" a bond is to redeem it via the bondholder. This privilege must be set down in writing before the bond is sold to the buyer.

A _______ is a federal government security sold in auctions and at a discount.

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Treasury bill

Repurchase agreement

Commercial paper

Treasury bill. This is the only money market investment sold this way.

Agencies of the US government sell their own bonds.

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True

False

True. To finance their activities, they sell bonds to the public.

Which of the following does not sell municipal bonds?

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The federal government

States

Cities

Certain districts

The federal government. Municipalities are state, county, or city levels of government.

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