1. What is a major advantage of pension plans?
a. All savings are federally insured.
b. Diversification
c. Taxes are deferred at least until retirement.
d. None of the above
2. Which of the following would be an example of a primary market transaction?
a. Buying shares of a closed-end mutual fund
b. Buying shares of an open-ended mutual fund
c. Buying a share of Berkshire Hathaway from your grandma.
d. None of the above
3. Which of the following explains why 10-year Treasury bonds have higher nominal interest rates than US Treasury bills?
a. more maturity risk
b. more default risk
c. a higher inflation premium
d. a higher real rate of interest
4. What price would you sell at if you owned a share of stock on the NASDAQ and wanted to sell your stock?
a. the bid price
b. the ask price
c. the average of the bid and ask price
d. None of the above