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Portfolios 410: Bonds and Money Market Investments

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1.
You can buy a savings bond for as little as _______.
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$25. This is the minimum amount; it increases by the penny.
2.
Which money market investment is used to pay for imports or exports?
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Banker's acceptance. This is used by banks to finance imports and exports.
3.
When you open a certificate of deposit, how long are you expected to leave your money there?
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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.
4.
Which of the following does not sell municipal bonds?
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The federal government. Municipalities are state, county, or city levels of government.
5.
Zero coupon bonds do not pay periodic interest to their owners.
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True. They lack "coupons," or periodic interest payments.
6.
What is the actual price of a government bond quoted at 92.4?
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$921.25. Government bonds are quoted as parts of $100. The 92 means $920. Amounts less than 1 are quoted in 32nds. Thus, the .4 in the quote means 4/32, which is $1.25. The quote works out to $920 + $1.25 = $921.25.