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Portfolios 410: Bonds and Money Market Investments

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1.
What is sold on the money market?
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Short-term debt securities. Money market investments are short-term. That is their distinguishing feature.
2.
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.
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.
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.
5.
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.
6.
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.