金融市场与金融机构基础-Fabozzi-Chapter15

1Copyright©2010PearsonEducationInc.PublishingasPrenticeHallFoundationsofFinancialMarketsandInstitutions,4e(Fabozzi/Modigliani/Jones)Chapter15TreasuryandAgencySecuritiesMarketsMultipleChoiceQuestions1MarketforTreasurySecurities1)TwofactorsaccountfortheprominentroleofU.S.Treasurysecurities:________.A)volume(intermsofsharesoutstanding)andliquidity.B)volume(intermsofdollarsoutstanding)andilliquidity.C)volume(intermsofdollarsoutstanding)andliquidity.D)volume(intermsofsharesoutstanding)andilliquidity.Answer:CDiff:2Topic:15.1MarketforTreasurySecuritiesObjective:15.1theimportanceoftheTreasurymarket2)ThelargevolumeoftotaldebtandthelargesizeofanysingleissuehavecontributedtomakingtheU.S.Treasurymarketthemostactiveandhencethemostliquidmarket________.A)intheworld.B)intheUnitedStates.C)inNewYorkCity.D)ontheEastCoast.Answer:ADiff:2Topic:15.1MarketforTreasurySecuritiesObjective:15.1theimportanceoftheTreasurymarket3)ComparedtotheUnitedStatesTreasurymarket,manyissuesinthecorporateandmunicipalmarketsare________.A)liquid.B)illiquid.C)tradedeasily.D)noneoftheseAnswer:BComment:Manyissuesinthecorporateandmunicipalmarketsareilliquidbycontrastandcannotbetradedreadily.Diff:2Topic:15.1MarketforTreasurySecuritiesObjective:15.1theimportanceoftheTreasurymarket2Copyright©2010PearsonEducationInc.PublishingasPrenticeHall4)InterestincomefromTreasurysecuritiesis________.A)subjecttofederal,state,andlocalincometaxes.B)subjecttolocalincometaxesbutisexemptfromfederalincometaxes.C)subjecttostateincometaxesbutisexemptfromfederalincometaxes.D)subjecttofederalincometaxesbutisexemptfromstateandlocalincometaxes.Answer:DDiff:2Topic:15.1MarketforTreasurySecuritiesObjective:15.1theimportanceoftheTreasurymarket5)WhichofthebelowstatementsisFALSE?A)CurrentTreasurypracticeistoissueallsecuritieswithmaturitiesofoneyearorlessasdiscountsecurities.B)Therearetwocategoriesofgovernmentsecurities:discountandcouponsecurities.C)Treasurysecuritiesareavailableinbook-entryformattheFederalReserveBank.D)Discountsecuritiespayinteresteverysixmonths,plusprincipalatmaturity.Answer:DComment:Couponsecuritiespayinteresteverysixmonths,plusprincipalatmaturity.Discountsecuritiespayonlyacontractuallyfixedamountatmaturity,calledmaturityvalueorfacevalue.Diff:2Topic:15.1MarketforTreasurySecuritiesObjective:15.8thezero-couponTreasurysecuritiesmarket6)WhichofthefollowingstatementsaboutTIPsisTRUE?A)TIPsrefertoTreasuryinflationprotectionsecurities.B)TIPsadjustforinflation.C)TheTreasuryhasissuedTIPSthatarenotesandbonds.D)AlloftheseAnswer:DDiff:2Topic:15.1MarketforTreasurySecuritiesObjective:15.2thedifferenttypesofsecuritiesissuedbytheTreasury3Copyright©2010PearsonEducationInc.PublishingasPrenticeHall7)Theinflation-adjustedprincipalatthebeginningoftheperiodis$203,000.Supposethatthesemiannualinflationrateforthenextsix-monthperiodis1%.Whatwillbetheinflation-adjustedprincipalattheendofthenextsix-monthperiod?A)$203,000B)$204,030C)$205,000D)$205,030Answer:DComment:Theinflation-adjustedprincipalattheendofthethissix-monthperiodistheinflation-adjustedprincipalatthebeginningofthesix-monthperiod($203,000)increasedbythesemiannualinflationrate(1%).Theadjustmenttotheprincipalis$2,030(1%times$203,000).So,theinflation-adjustedprincipalattheendofthethissix-monthperiodis$203,000+$2,030=$205,030.Diff:2Topic:15.1MarketforTreasurySecuritiesObjective:15.2thedifferenttypesofsecuritiesissuedbytheTreasury8)Becauseofthepossibilityofdisinflation(i.e.,pricedeclines),theinflation-adjustedprincipalatmaturitymayturnouttobelessthan________value.However,theTreasuryhasstructuredTIPSsothattheyareredeemedatthe________theinflation-adjustedprincipalandtheinitialparvalue.A)theinitialpar;lesserofB)theinitialpar;greaterofC)theinitialmarket;greaterofD)theinitialmarket;lesserofAnswer:BDiff:2Topic:15.1MarketforTreasurySecuritiesObjective:15.2thedifferenttypesofsecuritiesissuedbytheTreasury9)TheU.S.DepartmentoftheTreasury________.A)makesthedeterminationoftheprocedureforauctioningnewTreasurysecurities.B)doesnotmakethedeterminationofwhentoauctionnewTreasurysecurities.C)doesnotmakethedeterminationwhatmaturitiestoissue.D)alloftheseAnswer:ADiff:2Topic:15.1MarketforTreasurySecuritiesObjective:15.3theoperationoftheprimarymarketforTreasurysecurities4Copyright©2010PearsonEducationInc.PublishingasPrenticeHall10)TheauctionforTreasurysecuritiesisconductedona________.A)oligopolisticbiddingbasis.B)negotiatedtenderbasis.C)firstcomefirstservedbasis.D)competitivebiddingbasis.Answer:DDiff:2Topic:15.1MarketforTreasurySecuritiesObjective:15.3theoperationoftheprimarymarketforTreasurysecurities11)Inregards,totheauctionforTreasurysecurities,whichofthebelowstatementsisFALSE?A)Noncompetitivetendersmaybesubmittedforuptoa$1millionfaceamountandarebasedonquantity,notyield.B)Theauctionresultsaredeterminedbyfirstdeductingthetotalnoncompetitivetendersandnonpublicpurchases(suchaspurchasesbytheFederalReserveitself)fromthetotalsecuritiesbeingauctioned.C)Bidsarearrangedfromthelowestpricetothehighestprice.D)ThehighestyieldacceptedbytheTreasuryisreferredtoasthestopyield,and