Questions from General Investment

Q: Compare and contrast commercial paper and Treasury bills. Which would typically

Compare and contrast commercial paper and Treasury bills. Which would typically offer a higher interest rate? Why?

Q: What is LIBOR? Why is it important?

What is LIBOR? Why is it important?

Q: Why do you suppose rates on some money market instruments are quoted

Why do you suppose rates on some money market instruments are quoted on a bank discount basis? (Hint: Why use a 360-day year?)

Q: What are the three different types of Treasury STRIPS that are publicly

What are the three different types of Treasury STRIPS that are publicly traded?

Q: Evaluate the following statement: “Treasury inflation protected securities (TIPS

Evaluate the following statement: “Treasury inflation protected securities (TIPS) pay a fixed coupon.”

Q: What is the difference between a market order and a limit order

What is the difference between a market order and a limit order? What is the potential downside to each type of order?

Q: What are premium, discount, and par bonds?

What are premium, discount, and par bonds?

Q: What are the coupon rate and current yield on a bond?

What are the coupon rate and current yield on a bond? What happens to these if a bond’s price rises?

Q: What is interest rate risk? What are the roles of a

What is interest rate risk? What are the roles of a bond’s coupon and maturity in determining its level of interest rate risk?

Q: Based on market history, what is the average annual standard deviation

Based on market history, what is the average annual standard deviation of return for a single, randomly chosen stock? What is the average annual standard deviation for an equally weighted portfolio of...