Households Are Increasingly Likely to Both Directly Purchase Securities (Perhaps

question 24

Multiple Choice

Households are increasingly likely to both directly purchase securities (perhaps via a broker) and also place some money with a bank or thrift to meet different needs. Match up the given investor's desire with the appropriate intermediary or direct security.
I. Money likely to be needed within 6 months
II. Money to be set aside for college in 10 years
III. Money to provide supplemental retirement income
IV. Money to be used to provide for children in the event of death
1) Depository institutions
2) Insurer
3) Pension fund
4) Stocks or bonds

• A) 2, 3, 4, 1
• B) 1, 4, 2, 3
• C) 3, 2, 1, 4
• D) 1, 4, 3, 2
• E) 4, 2, 1, 3

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Definitions:

Cake Factory

A facility dedicated to the mass production of cakes and related bakery items for distribution and sale.

Conversion Cost

The sum of direct labor and manufacturing overhead costs that are required to transform raw materials into finished goods.

Depreciation

The methodical distribution of the expense of a physical asset throughout its expected lifespan.

Oven

An enclosed compartment, usually part of a stove, used for cooking and baking.