1_Treasury inflation-protected securities (TIPS) offer a fixed coupon rate with respect to the consumer price index.

Select one:

True

False

2_A depository institution, in the form of savings and loans, credit unions is - ________

Select one:

a. Pension funds

b. None of the answers are correct

c. Investment banks

d. Insurance companies

e. Thrifts

3_ Primary and secondary markets are markets for short-term and long-term securities, respectively.

Select one:

True

False

4_

The forward FX transaction involves the immediate exchange of currencies at the current exchange rate

Select one:

True

False

5-Muscat Co. has an outstanding issue of bond with a par value of OMR 1,000, paying a 12 % coupon rate semi-annually. The bond was issued 25 years ago and has 5 years to maturity. What is the value of the bond assuming a 14 % rate of interest?

Select one:

a. OMR 931.372

b. None of the answers are correct

c. OMR 1,000

d. OMR 1582.68

e. OMR 929.7

6_Long-term debt instruments used by both government and business are known as preferred stocks.

Select one:

True

False

7_ Bonds which sell at less than face value is priced at a ________, while bonds which sell at greater than face value sell at a

Select one:

a. coupon; premium

b. discount; par

c. None of the answers are correct

d. par; premium

e. discount; premium

8_ Muscat Co. has an issue of OMR 1,000 par value bonds with a 14 % annual coupon interest rate. The issue has ten years remaining to the maturity date. Bonds of similar risk are currently selling to yield a 12 % rate of return. The current value of each Muscat Co. bond is

Select one:

a. OMR 1,052.24

b. OMR 1,113.00

c. OMR 1,000

d. None of the answers are correct

e. OMR 791.00

9_ The term structure of interest rates is a graphical presentation of the relationship between the maturity and rate of return.

Select one:

True

False