1. Betty has saved $60,000 for a down payment on a home. She is now actively looking for her dream house and anticipates making an offer on a home within the next two months. If the offer is accepted, it will take up to three additional months to close on the house. Betty will need to deposit about $1,000 in an escrow account as "good faith" money when she makes the offer. The rest of the down payment is made at closing. The best place for Betty to deposit her funds now is
A: the stock market.
B: a municipal bond.
C: a six-month certificate of deposit (CD).
D: $1,000 in a two month certificate of deposit (CD) and the remainder in a six-month CD.
E: a money market mutual fund.
2. Cameron pays 15% in dividend and capital gains taxes and 35% in ordinary income taxes. Ten years ago, Cameron purchased a position in a limited partnership for $10,000. Three years later, she was required to contribute $2,000 more to the partnership. Two years ago, she was required to contribute an additional $2,000. If Cameron sells her limited partnership investment today for $20,000, what are the taxes?
A: $ 900
B: $1,500
C: $2,100
D: $2,700
E: $3,500
3. Bonds A, B and C are all zero-coupon bonds. Bond A matures in 3 years; Bond B matures in 7 years, and Bond C matures in 10 years. Paul is uncertain as to the direction of interest rates over the next several years, so he wants to lock-in his return over his 7 year time horizon. Which bond is best for Paul?
A: Bond A because it matures in 3 years, and Paul can then roll-over the Funds to a 4 year bond.
B: Bond B because it matches Paul's time horizon.
C: Bond C because it has a longer maturity, it will probably have a higher yield.
D: Since these are zero-coupon bonds, it does not matter which bond Paul chooses.
E: Bonds are too risky for Paul to be investing.
4. Assume that the futures price of gold is $390 a troy ounce, and the contract is for 100 troy ounces. The initial margin is $2,000. If the future price increases by 5.0%, what is the return to the investor?
A: 1.0%
B: 2.5%
C: 5.0%
D: 19.5%
E: 97.5%