BAFI3273 W3 Bank, Commercial and Asset Backed Money Markets

Marketable securities are primarily

• long-term investments that are difficult to sell.
• short-term investments that are easily tradable.
• physical assets that require storage.
• non-liquid assets that cannot be traded easily.

Commercial paper is essentially

• a short-term unsecured promissory note issued by companies.
• a long-term secured loan from banks.
• a type of equity investment in startups.
• a government-issued bond for infrastructure projects.

Which of the following marketable securities is the obligation of a commercial bank?

• Certificates of Deposit (CDs)
• Treasury Bills
• Corporate Bonds
• Equity Shares

Asset-backed commercial paper differs from conventional commercial paper in that:

• Asset-backed commercial paper has a longer maturity than conventional commercial paper.
• Conventional commercial paper is secured by specific assets.
• Asset-backed commercial paper is secured by specific assets.
• Asset-backed commercial paper is issued by the government.

A promissory note:

• A type of bank loan agreement.
• A financial instrument containing a promise to pay.
• A legal document for real estate transactions.
• A contract for the sale of goods.

Repurchase agreement is:

• A loan agreement between two parties.
• A type of stock market investment.
• A financial transaction where one party sells an asset and agrees to repurchase it later.
• A long-term lease of an asset.

What is not correct about certificate of deposit?

• CDs have no minimum deposit requirement.
• CDs are not highly liquid.
• You can withdraw funds anytime without penalty.
• CDs offer high liquidity.

Which of the following is a characteristic of a certificate of deposit (CD)?

• CDs typically offer higher interest rates than savings accounts.

• CDs are insured by the government up to a certain limit.

• CDs are only available for corporate investors.

• CDs can be easily converted to cash without penalties.

What is a key advantage of investing in a certificate of deposit (CD)?

• CDs are not insured by the government.

• CDs typically have lower interest rates than savings accounts.

• CDs offer guaranteed returns over a fixed term.

• CDs can be withdrawn at any time without penalties.

Which of the following statements is true regarding commercial paper?

• Commercial paper is secured by physical assets.

• Commercial paper is usually issued by governments.

• Commercial paper is a short-term debt instrument.

• Commercial paper is a long-term investment.