16.

Money markets, like debt and equity markets, play an important role in moving funds from those having funds to those needing funds. However, unlike the other markets, A) all money market securities outstanding today will not exist one year from now. B) the actual rate of return on money market securities depends on the denomination of the initial investment. C) all money market securities have variable rates of return. D) the SEC oversees all money market transactions. E) corporations are restricted from the money market.

17.

Which of the following is a likely security that can substitute for a money market security? A) An originally issued 20-year corporate bond that has 7 years remaining to maturity. B) Corporate common stock that does not pay dividends. C) An originally issued 10-year U.S. Treasury note that has 3 years remaining to maturity. D) Corporate cumulative preferred stock. E) An originally issued 20-year U.S. Treasury bond that has 45 days remaining to maturity.

18.	Rates on repurchase agreements and fed funds are stated A) on a bond equivalent basis with a 365-day year. B) as a discount yield with a 360-day year. C) as an equivalent annual return (EAR). D) on a bond equivalent basis with a 360-day year. E) as a discount yield with a 365-day year.