This document provides information and instructions for a non-graded quiz for an investments course. It includes a 12 question quiz covering topics like money market funds, convertible bonds, preferred stock, municipal bonds, and other investment vehicles. Students are instructed to submit their answers in a Word document with a specific file name format by a deadline.

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FINC 340 Investments
Week 1 Non-Graded Quiz
DIRECTIONS: Here is the Week01 Non-Graded Quiz Answer Sheet that you should
submit to your P1- Homework Assignment Folder.
Please submit your Week01 Non-Graded Quiz in MS Word format with the following file
name: LastNameFirstInitial_Week01NonGradedQuizAnswerSheet.docx. For example, if
you name is John Smith, the file name of your Answer Sheet should be
SmithJ_Week01NonGradedQuizAnswerSheet.docx.
If you have any questions or comments, please do not hesitate to contact me.
NAME: _____________________________________
Non-Graded
Quiz Number
1
Question
Advantages of investing in money market funds include:
A:
B:
C:
D:
Liquidity
Personalized check writing services
Federally insured
All of the above are advantages to money market funds
investing
E: A and B only are advantages; C is not an advantage
2
The “floor” for a convertible bond is
A:
B:
C:
D:
E:
3

2. The par value of the convertible bond
The intrinsic value of the bond itself
The value of a straight bond
All of the above are true
B and C are true, but A is false
Disadvantages of investing in preferred stock include:
A: Dividends are fixed even if the financial condition of the
firm improves
B: No change in the share price if market interest rates
change
C: Uncertain cash flows from dividends
D: Last to be paid in case of bankruptcy
E: Usually a lower dividend yield than common equity
1
FINC 340 Investments
Week 1 Non-Graded Quiz
4
A right gives the holder the option to purchase a specified
number of a company’s share at the
A:
B:
C:
D:
E:
5
Types of municipal bonds include all of the following EXCEPT:
A:
B:
C:
D:
E:
6
Exercise price
Par value
Strike price
All of the above are correct
A and C are correct, but B is incorrect
General obligation bonds

3. Treasury notes
Private purpose bonds
Revenue bonds
All of the above are types of municipal bonds
Users of strips as an investment alternative include all of the
following EXCEPT:
A: Investors who need a specified accumulation at the
maturity date
B: Conservative investors
C: Children under the age of 14
D: Investors desiring steady cash inflows
E: All of the above are potential strip investors
7
Investors in corporate zero-coupon bonds include all of the
following EXCEPT:
A: Tax-exempt retirement plans
B: Conservative investors who want to lock-in their returns
C: Investors who are saving for their children’s college
education
D: Investors who do not need current cash flows
E: All of the above are potential zero-coupon investors
2
FINC 340 Investments
Week 1 Non-Graded Quiz
8
Information included in a promissory note includes all of the
following EXCEPT:
A:
B:
C:
D:
E:
9
U.S. Government securities include all of the following EXCEPT:
A:
B:
C:
D:
E:

4. 10
Treasury bills
Treasury notes
Federal Land Bank bonds
National Bank, Inc. bonds
Treasury bonds
A debenture
A:
B:
C:
D:
E:
11
Identification of the parties
Coupon rate
Method used to calculate the interest
Current yield
Maturity date
Is unsecured debt
Has priority over preferred stock if bankruptcy occurs
Is backed by the general credit of the issuing firm
All of the above are true
A and B are true, but C is false
Benefits of Guaranteed Investment Contracts (GICs) include all
of the following EXCEPT:
A: Higher rate of return than CD accounts
B: Transferring the management of assets for a retirement
account to the insurance company
C: Federal insurance
D: Transferring the investing of assets for a retirement
account to the insurance company
E: All of the above are benefits of GICs
12
Advantages of investing in common stock include:
A:
B:
C:
D:
E:

5. Assured regular cash flows through dividends
Guaranteed higher returns than money market funds
Low volatility of returns
Participation in the growth of the firm
Security of principal
3
FINC 340 Investments
Week 1 Non-Graded Quiz
4