1. Savings institutions commonly _ to reduce their risk.

sell futures contracts on treasury bonds

purchase futures contracts on treasury bonds

sell futures contracts on stock indexes

purchase futures contracts on stock indexes

2.Hedge funds (HF) differ from open-end mutual funds in the sense that

HF invest in very limited set of securities.

HF require a much smaller initial investment.

HF are open to additional investments at any time.

HF investors cannot sell shares back to the fund at any time they desire.

3.Which of the following statements about exchange-traded funds (ETFs) is NOT TRUE?

ETFs differ from most open-end and closed-end funds in that they are not actively managed.

ETFs are designed to mimic particular stock indexes and are traded on a stock exchange.

One disadvantage of ETFs is that each purchase of additional shares must be done through the exchange where they are traded.

Unlike a closed-end fund, an ETF has a fixed number of shares.

4.When the redemptions of money market mutual fund shares exceeds sales of shares, the fund accommodates the amount of excessive redemptions by

issuing bonds.

borrowing from banks.

issuing stock.

selling some of the assets contained in the portfolio.