Income Beginner: Bonds and Money Market Investments

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1.
One advantage of savings bonds is _______.
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The small minimum purchase required. You can buy savings bonds in amounts as low as $25.
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.
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.
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.
When a bondholder may redeem a bond before it matures, the privilege must be set down in a ________.
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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.
6.
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.