1. Why should the investment officer be concerned about the loan covenants on the company's loans?

a. They may force the company to invest in high-risk, high-return securities in order to have enough interest revenue to pay the loan's interest expense

b. They may include fine print forcing the company to engage in illegal activities

c. They may prohibit certain types and/or amounts of investments

d. All of the above

2. An increase in the Average Collection Period, all other things equal, would ___________ the cash conversion period and reflect ________________ liquidity

a. Decrease, increased

b. decrease, decrease

c. increase, decrease

d. increase, decreased

3. Which of the following is not generally a feature or advantage of most money market mutual funds?

a. greater flexibility

b. higher yield than a checking account

c. enhanced liquidity

d. exemption from state and local income taxes