Income Beginner: Bonds and Money Market Investments

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1.
Certificates of deposit are popular savings investments for people _______.
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Who do not want to take a lot of risk with their money. Certificates of deposit are low-risk investments and do not get high earnings.
2.
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.
3.
Which of the following contains more than one security?
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Money market mutual fund. A mutual fund buys numerous securities.
4.
________ securities cannot be traded through exchanges or over the counter.
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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.
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.
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.