NAME (last, first) SIGNATURE \" open notes PROVIDE THE BEST ANSWER 1. The motive
ID: 2809440 • Letter: N
Question
NAME (last, first) SIGNATURE " open notes PROVIDE THE BEST ANSWER 1. The motive for investment is best describes as: a. Making money b. Deferring your consumption c. Saving for a rainy day d. None of the above ANS: 2. Your Certificate of Deposit will mature in one week and you are considering how to invest the proceeds. If you invest in a 30-day CD the bank will pay you 4%. If you invest in a 2-year CD the bank will pay you 6% interest, which option would you choose? a. the 30-day CD, no matter what you expect interest rates to do in the future b. the 2-year CD, no matter what you expect interest rates to do in the future c. the 30-day CD if you expect that interest rates will fall in the future d. the 2-year CD if you expect that interest rates will fall in the future ANS: 3. Real assets in the economy include all but which one of the following? a. land b buildings c. consumer durables d. common stock ANS: 4. The material wealth of society is determined by the economy's tion of the economys a. investment bankers; financial assets b. investment bankers; real assets c. productive capacity; financial assets d. productive capacity; real assets ANS: which is a func- 5. Which of the following is not a money market security? a. U.S. Treasury bill b. 6-month maturity certificate of deposit c. common stock d. All of the above. ANS:_ C-1 FIN 344 QuizExplanation / Answer
Solution:
1. The motive of investment is to primarily make money .We invest becuase we want to get return on the investments So option A seems more apt
2. If we are expecting that interest rate will go down then we shoud invest in 2-year CD as it is paying 6% as compared to 30-days CD that pays 4%
If we are expecting that interest rate will go higher in future then we shuld invest in short tem maturity CD
Option D looks correct in this case
3.
Common stock is the financial asset while land , building and concumer durable are rea assets
Option D is correct
4.
The material wealth of economy is determined by the productive capacity. Productive capacity means how much we can produse as an ecomomy and this is material wealth . Productive capacity can be fucnction of real assets as due to this assets the capacity can be increased. Financial assets are not the function of Capacity
Solution : Option D is correct
5. Money Market securities are those security which has maturity of less than 1- Year .
Here common stock is not the money market Security beccause it does not mature within an year.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.