Money Market Instruments and Securities Quiz
Test your understanding of money market instruments with these questions on Treasury Bills, commercial paper, repos, and more.
#1
Which of the following is considered a money market instrument?
Corporate Bonds
Treasury Bills
Common Stocks
Real Estate
#2
What is the primary purpose of a money market mutual fund?
Providing long-term loans to corporations
Investing in real estate
Facilitating short-term borrowing by individuals and institutions
Issuing long-term government bonds
#3
What is the main function of a money market hedge?
To speculate on future interest rate movements
To protect against currency exchange rate fluctuations
To invest in long-term securities
To provide long-term loans to businesses
#4
Which of the following is a characteristic of a money market mutual fund?
Guaranteed high returns
Low liquidity
Long-term investment horizon
Daily share price fluctuations
#5
What is the typical maturity period of a Treasury Bill?
30 days
6 months
1 year
5 years
#6
Which money market security represents an ownership interest in a pool of mortgages?
Commercial Paper
Repurchase Agreements
Mortgage-Backed Securities
Treasury Bonds
#7
Which money market instrument is often used by governments to manage short-term cash flow?
Commercial Paper
Treasury Bills
Certificates of Deposit
Municipal Bonds
#8
What is the role of a money market dealer or broker?
Issuing government securities
Facilitating the buying and selling of money market instruments
Providing long-term loans to businesses
Managing investment portfolios
#9
What is the purpose of a certificate of deposit (CD) in the money market?
To facilitate international trade
To provide long-term financing for corporations
To raise capital through equity
To allow banks to raise short-term funds
#10
Which of the following is a characteristic of commercial paper?
Long maturity period
High liquidity
Issued by the central bank
Backed by government guarantee
#11
Which of the following is an example of a repurchase agreement (repo)?
Selling government bonds to buy stocks
Selling securities with an agreement to buy them back
Issuing long-term corporate bonds
Lending money for a fixed period
#12
In the context of money market instruments, what does the term 'Yield' refer to?
The annual interest rate on a security
The maturity period of a security
The face value of a security
The trading volume of a security
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