T-bills Versus CDs.Compare the interest rates offered on T-bills and CDs. Which type of investment is more liquid? Why?

Which of the following is true?(Select the best answer below.)

A.

T-bill returns are slightly lower than the return on a CD but T-bills are less liquid because no secondary market exists for T-bills but it does for CDs.

B.

T-bill returns are slightly higher than the return on a CD but T-bills are more liquid because a secondary market exists for T-bills but not for CDs.

C.

T-bill returns are slightly higher than the return on a CD but T-bills are less liquid because no secondary market exists for T-bills but it does for CDs.

D.

T-bill returns are slightly lower than the return on a CD but T-bills are more liquid because a secondary market exists for T-bills but not for CDs.

MMDAs.How does a money market deposit account (MMDA) differ from a NOW account? When might a depositor use a MMDA?

(Select the best answer below.)

A.

neither require a minimum balance .

B.

both require a minimum balance .

C.

minimum balances are generally higher for an MMDA.

D.

only MMDAs are offered by banks

,

Question needs grading. Grade: of 1 pt Submit Grade Skill Builder Question Help Settings Accessibility + On-Screen Keyboard + About +

NOW Account.What is a NOW account? How is it different from a regular checking account? How does a savings account compare with a NOW account?

NOW stands for:(Select the best answer below.)

A.

negotiable order waiting.

B.

new order waiting.

C.

negotiable order of withdrawal.

D.

negotiable offered withdrawal.

NOW accounts:(Select the best answer below.)

A.

are the same as a savings account.

B.

do not require a minimum balanced

C.

are less liquid than a regular savings account

D.

are less liquid than a regular checking account

Cash Flow Deficiency.Name some ways an individual might handle a cash flow deficiency. Which way would be preferable? Why?

If an individual had a cash flow deficiency, they would preferably:(Select the best answer below.)

A.

borrow funds for the short term from a family member.

B.

borrow funds for the short term from a bank.

C.

rely on credit cards to cover cash shortfalls.

D.

keep enough cash in liquid investments to cover deficiencies.