Answer the following multiple choice question. Choose the correct answer only. No explanation is required. Each question 1 mark

1. Which one of the following is true

1. Money market securities are less liquid
2. Money market securities are more risky than the capital market securities
3. Money market securities have lower return than that of capital market securities
4. All of these
5. None of these

2. Which is not true for commercial paper?

1. Is issued by large companies, financial institution such as finance companies and bank holding companies.
2. it is typically unsecured
3. has a minimum denomination of $100,000
4. has no active secondary market

3. An investor purchases a 91-day T-bill for $9872. What is the bill discount?

1. 2.16%
2. 8.62%
3. 8.94%
4. 2.24%

4. Which of the following is the operating target of the monetary policy in Bangladesh?

1. Open market operation
2. Reserve money
3. Money Supply
4. Controlling Inflation
5. Economic growth

5. If market interest rate is higher than the coupon rate then the bond is sold at ----------, and if the coupon rate is higher than market rate, then the bond is sold at ----------

1. Premium; Discount
2. Discount; Premium
3. Primary market; secondary market
4. Money Market; Capital market

6. Which of the following events would make it more likely that a company would choose to call its outstanding callable bonds?

1. A reduction in market interest rates
2. The companys bonds are downgraded
3. An increase in the call premium
4. all of these

7. Which of the following is an expansionary monetary policy?

1. Open market sales
2. Increasing discount rate ( Bank rate)
3. lowering reserve requirement
4. Increasing excise duty

8. Which is a money market instrument?

1. Commercial Paper
2. Municipal Bond
3. Saving Certificate issued by the Government
4. Debentures
5. Common Stock

9. The government Treasury Bill has

1. No risk
2. No interest rate risk, but has default risk
3. No default risk, but has interest rate risk
4. Both interest rate risk and default risk

10. Which of the following is not an objective of monetary policy

1. Maintaining Price stability
2. Achieving high economic growth
3. Maintaining exchange rate stability
4. Maintaining lower inretesr rate spread
5. Maintaining high level of employment