Chapter 2 Financial Instruments
Multiple Choice Questions
(选作1-26、30-32、35、37、39、40、42、47、52、63、64、66、67
Multiple Choice Questions
1. Which of the following is not a characteristic of a money market instrument?
A) liquidity
B) marketability
C) long maturity
D) liquidity premium
E) C and D
Answer: E Difficulty: Easy
Rationale: Money market instruments are short-term instruments with high liquidity
and marketability; they do not have long maturities nor pay liquidity premiums.
2. Which one of the following is not a money market instrument?
A) a Treasury bill
B) a negotiable certificate of deposit
C) commercial paper
D) a Treasury bond
E) a Eurodollar account
Answer: D Difficulty: Easy
Rationale: Money market instruments are instruments with maturities of one year or less,
which applies to all of the above except Treasury bonds. See Table 2.1, page 33.
3. T-bills are financial instruments initially sold by ________ to raise funds.
A) commercial banks
B) the U. S. government
C) state and local governments
D) agencies of the federal government
E) B and D
Answer: B Difficulty: Easy
Rationale: Only the U. S. government sells T-bills in the primary market.
