12.8: Multiple Choice
- Page ID
- 94698
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1.
Which of the following statements about Treasury bills is false?
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T-bills sell at a discount from face value and pay the face value at maturity.
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T-bills have maturities of 2, 3, 5, 7, or 10 years.
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T-bill auctions take place weekly.
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T-bill denominations are relatively small compared to other money market instruments, with initial auction sizes of as little as $10,000 per T-bill.
2.
If an investor wishes to simply execute a stock trade at the current market price, they should issue a ________.
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limit order
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stop loss order
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market order
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hedge order
3.
Based on nominal average annual returns over the period 1980–2020, list the order of returns by asset class from highest to lowest.
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large company stocks, Baa bonds, small company stocks, T-bills
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small company stocks, large company stocks, Baa bonds, T-bills
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T-bills, Baa bonds, small company stocks, large company stocks
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small company stocks, large company stocks, T-bills, Baa bonds
4.
A $1 investment in a portfolio of small company stocks in 1928 would have grown to over ________ by mid-2019.
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$35,000
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$8,000
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$800
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$80
5.
Since 1980, the compound average annual growth rate for large company stocks has been ________.
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greater than Baa bonds but less than small company stocks
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greater than small company stocks but less than Baa bonds
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greater than Baa bonds and small company stocks
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less than Baa bonds and small company stocks