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Portfolios 410: Bonds and Money Market Investments

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1.
Agencies of the US government sell their own bonds.
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True. To finance their activities, they sell bonds to the public.
2.
Which of the following contains more than one security?
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Money market mutual fund. A mutual fund buys numerous securities.
3.
You can buy series EE savings bonds only through TreasuryDirect.
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True. TreasuryDirect is now the only way to buy them.
4.
When a bond is called back by the company, it is done so at the _______.
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Call price. This is the price at which it the holder must redeem the bond.
5.
Most municipal bonds are free of _______ on distributions of interest.
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Federal tax. They are also free of state and local taxes in the states in which they are issued. However, if you own one from one state but you live in another, you will owe state and/or local taxes on it.
6.
Generally, the longer the maturity on a CD, the higher the interest rate.
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True. High interest rates are a way of rewarding investors for leaving their money invested for long periods.