Which of the Following Securities Is Most Likely to Be

question 55

Multiple Choice

Which of the following securities is most likely to be used in a repo transaction?

• A) commercial paper
• B) certificate of deposit
• C) Treasury bill
• D) common stock
• E) All of the above are equally likely to be used in a repo transaction.

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Definitions:

Receivables

Amounts owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Accounts Receivable Turnover

A financial ratio that measures how effectively a company collects on its credit sales by dividing total credit sales by the average accounts receivable.

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.

Eighteen Months

A period of time equal to one and a half years.