Question

Compared to treasury securities, agency securities usually have slightly __________ credit risk and slightly ___________ nominal...

Compared to treasury securities, agency securities usually have slightly __________ credit risk and slightly ___________ nominal yields.

lower, higher
higher, lower
higher, higher
lower, lower

Which of the following best defines cash concentration?

Combining a week's worth of cash receipts into one bank deposit

Splitting deposits between different banks

Combining cash from multiple bank accounts into one main accoun

Combining all of the firm's receipts into one bank deposit

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Answer #1

1: Lower; higher

Agency bonds represent safe investments and carry lower risk as compared to Treasury securities. It carries higher return than Treasury securities.

2: Combining cash from multiple bank accounts into one main account

Cash concentration refers to transfer of funds from different accounts into a single account to increase the efficiency of cash management. Other options are not cash concentration.

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