Income Beginner: Bonds and Money Market Investments

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1.
________ securities cannot be traded through exchanges or over the counter.
Choose wisely. There is only one correct answer.
Non-marketable. They are called non-marketable because they cannot be sold to other investors after they have been issued. They must be redeemed back to the government.
2.
You can buy series EE savings bonds only through TreasuryDirect.
Choose wisely. There is only one correct answer.
True. TreasuryDirect is now the only way to buy them.
3.
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.
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.
Generally, the longer the maturity on a CD, the higher the interest rate.
Choose wisely. There is only one correct answer.
True. High interest rates are a way of rewarding investors for leaving their money invested for long periods.
6.
A _______ is a federal government security sold in auctions and at a discount.
Choose wisely. There is only one correct answer.
Treasury bill. This is the only money market investment sold this way.