1. Municipal bonds, or munis,

a. are usually a safe investment.

b. pay higher interest rates than most bonds.

c. are often risky investments.

d. are not usually tax-exempt.

2. The Efficient Market Hypothesis argues that

a. stocks are generally overpriced.

b. every investment has some risk.

c. stocks are usually priced about right.

d. all investments are the same.

3. The par value of a bond is

a. a rating of the quality of a bond.

b. the total amount borrowed.

c. the stated interest on the debt.

d. its purchase price.

4. Which of the following is true regarding the trade offs associated with money?

a. If we invest money, those same funds will not immediately be available for spending.

b. Because of scarcity, all of these are correct.

c. Because of scarcity, if we spend a certain amount of money, that same money will not be available to invest.

d. Investors have made the decision to put off spending now in hopes that they money they invested will create more money.

5. Which of the following statements is true?

a. All of these are correct.

b. There are trade-offs invovled in using credit cards.

c. By using a credit card, you may be able to immediately get a good or service that you cannot pay for with cash, but, because of the interest, you will end up paying more than the "price tag" amount.

d. Credit cards often have a "spending limit".