1. 13. By definition, the money market involves the buying and selling of:

   a. stocks & bonds

   b. short-term finds

   c. funds that mature in up to 5 years

   d. US Government Securities (bills, notes and bonds)

2 points

Question 14

1. 14. The three theories cited to explain the general shape of the yield curve are all of the followingexcept:

   a. expectations hypothesis

   b. market segmentation theory

   c. liquidity preference theory

   d. security markets theory

2 points

Question 15

1. 15. A firm has just ended its calendar year making a sale in the amount of $160,000 of merchandise purchased during the year at a cost of $124,500. Although the firm paid in full for the merchandise during the year, it has yet to collect at year end from the customer. The net profit and cash flow from this sale are:

   a. $0 and $160,000 respectively

   b. $35,500 and ($124.500)

   c. $37,500 and ($112,500)

   d. $150,000 and ($124,500)