Part I. Multiple Choice Questions (70 points) Instruction: Choose the best answer for each of the following questions. The questions are worth 2 points each. Mark your answer clearly. You can use a financial calculator to solve the problems. 1. Which of the following is a money market instrument? A) Treasury Bond B) Preferred Stock Municipal Bond D) Eurodollar 2. Borrowing a security from your broker in order to sell it, with the intention of repurchasing it later when the price is lower, is called A) post-purchasing B) pre-selling C) short-selling D) reverse investing 3. Investors purchase Treasury bills at a and receive the at maturity A) B) C) D) discount; face value premium; face value plus interest discount; face value plus interest premium; face value 4. An investor sells short 200 shares of stock at S15 per share. The initial margin requirement is 60%. The investor cams no interest on funds in the margin account and no dividends are paid. What is the investor's rate of return after one year if the short sale is covered at $12 per share? A) 20.0% B) -20.0% C) 33.3% D) -33.3% 5. Shares of a closed-end fund A) always trade at net asset value, because large investors can redeem their shares in the fund for a portfolio of stocks B) always trade at net asset value, because all investors can redeem their shares in the fund for net asset value can trade at a substantial discount from net asset value D) can trade at a substantial premium above net asset value