In general, which of the following institutions will most likely have a high need for liquidity and a short investment time horizon? O Bank. O Endowments. Defined benefit pension plans.A sovereign bond which has a maturity of 15 years can be described as a: O perpetual bond. O pure discount bond. O capital market security.A repurchase agreement is most comparable to a(n): interbank deposit. O collateralized loan. O negotiable certificate of deposit.Which of the following content is in affirmative covenants? O the company can't sell assets that have been pledged as collaterals. O to insure and perform periodic maintenance on financed assets. O the company can't borrow additional money unless certain financial conditions are met.The final step in the portfolio management process is most likely to include: O investment research. O portfolio construction. O evaluation of portfolio performance.An investor who requires no premium to compensate for the assumption of risk is said to be which of the following? O risk seeking. O risk averse. O risk neutral.Which kind of bond has a fixed periodic payment schedule that reduces the bond's outstanding principal amount to zero by the maturity date? O Bullet bond. O Plain vanilla bond. O Fully amortized bond.The bond issued by a multilateral agency such as the international monetary fund can be regarded as a: O sovereign bond. O supranational bond. O quasi-government bond.The portfolio of a risk-free asset and a risky asset has a better risk-return trade-off than investing in only one asset type because the correlation between the risk-free asset and the risky asset is equal to: O -1.0. O 0.0. O 1.0.Arbitrage opportunities exist when: two identical assets or derivatives sell for different prices. O combinations of the underlying asset and a derivative earn the risk-free rate. O arbitrageurs simultaneously buy takeover targets and sell takeover acquirers