Series 7

Series 7 practice questions, page 9 of 16, with answer review and explanations.

Question 41

When depositors withdraw money from savings institutions to invest in US treasury securities, this is called:

  1. the multiplier effect
  2. disintermediation
  3. reverse repo
  4. open market operations

Question 42

Smart Company, Inc., has cash it intends to use in six months for purchase of equipment. The most prudent investment during the six-month period is:

  1. common stock
  2. preferred stock
  3. treasury bills
  4. treasury bonds

Question 43

Which of the following is identified as a funded debt instrument?

  1. US treasury bond
  2. Series EE savings bond
  3. corporate bond
  4. Fannie Mae bond

Question 44

A typical money market instrument carries which of the following?

  1. serial bond maturity date
  2. long-term maturity date
  3. medium-term maturity date
  4. short-term maturity date

Question 45

An offering price of 102 plus accrued interest applies to which of the following securities?

  1. treasury bills
  2. certificates of deposit
  3. commercial paper
  4. banker’s acceptances