61) Funds deposit at commercial banks having variable maturities and : 1415288
61) Funds on deposit at commercial banks having variable maturities and yields based on size, maturity, and prevailing money market conditions are ________.
A) negotiable certificates of deposit
B) commercial paper
C) savings accounts
D) money market mutual funds
62) ________ float is the time that elapses between the deposit of a check by the payee and the actual availability of funds.
63) Which of the following is true of a repurchase agreement?
A) It results from a bank guarantee of a business transaction; sold at discount from maturity value.
B) It provides a return slightly below that obtainable through outright purchase of similar marketable securities.
C) It is issued by professional portfolio management companies.
D) Its maturity period lies between 1 to 10 years.
64) The yield on commercial paper is generally higher than the yield on ________.
A) preferred stock
B) a corporate bond
C) common stock
D) a Treasury bill
65) Which of the following instruments demonstrates the safety of principal characteristic common to marketable securities?
A) common stock
D) Treasury bonds
66) A security experiencing little or no loss in value over time is said to have a ________.
A) safety of return
B) safety of principal
C) safety of maturity
D) risk of payments
67) Federal agency issues ________.
A) are obligations of U.S. treasury
B) generate slightly higher returns than corporate bonds
C) generate slightly higher returns than U.S. Treasury issues
D) don't have strong secondary market
68) Sound cash management techniques would support ________.
A) minimizing collection float, maximizing disbursement float, and minimizing the cash conversion cycle
B) minimizing collection float, maximizing disbursement float, and minimizing the cash turnover
C) maximizing collection float, minimizing disbursement float, and minimizing operating cash flow
D) minimizing collection float, maximizing disbursement float, and maximizing investing cash flow
69) A firm expects to have funds of $150,000 idle for 60 days. If the firm could purchase marketable securities yielding 10 percent and pay brokerage fees of $1,500, the firm ________.
A) should make the investment since interest earned exceeds brokerage fees
B) should not make the investment since the required rate of return is less than the cost of investment
C) should leave the $150,000 in cash
D) should invest the funds for more than 60 days due to the favorable rate
70) The risk of an investment in a Eurodollar deposit is partially due to ________.
A) the fact that the center of the Eurodollar market is in London
B) the fact that the majority of these deposits are not in the form of U.S. dollars
C) the presence of some foreign exchange risk
D) the fact that these instruments only pay interest at maturity