1. If the Fed wanted to decrease the money supply it would most likely

a. sell Treasury securities through open market operations.

b. buy Treasury securities through open market operations.

c. ask the Treasury to print more money.

d. none of the above.

2. if a firm fails and the assets are sold, the proceeds are distributed in this order:

a. employees, equity holders, government, creditors, customers.

b. employees, customers, creditors, equity holders, government.

c. employees, customers, government, creditors, equity holders.

d. government, customers, creditors, equity holders, employees.

3. Your uncle would like to restrict his interest rate risk and his default risk, but he still would like to invest in corporate bonds. He would most likely invest in

a. AAA bonds with 30 years to maturity

b. AAA bonds with 10 years to maturity

c. BBB bonds with 30 years to maturity

d. BBB bonds with 10 years to maturity