$3$

Multiple Choice

$1$ point

Financial intermediaries exist because small investors cannot efficiently

$$diversify their portfolios

gather information

assess and monitor the credit risk of borrowers

$8$

Multiple Cholce $1$ point

A municipal bond carries a coupon rate of $7\mathrm{.}00\%$ and is trading at par. What would be the equivalent taxable yield of this bond to a taxpayer in a $40\%$ combined tax bracket?

$11\mathrm{.}67\%$

$7\%$

$10\%$

$13\mathrm{.}80\%$

$5$

Multiple Choice $1$ point

Treasury bills are financial instruments issued by $$ to raise funds.

the federal government

state and city governments

large corporations

commercial banks