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Discussion Questions

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* It is often said that money markets are not used to get rich, but to avoid being poor. Do you agree or disagree with this statement? Provide support for your opinion. Which markets do you prefer? Explain why.

* Why are junk bonds perceived as offering high returns with high risk? Which of the numerous risks associated with bonds is the most tolerable in your opinion? Explain why.

* Should the laws that govern the participation of individuals in money markets be different from those that apply to the government or to businesses? Explain.

* You have just received an inheritance of $150,000. You must invest it within 90 days to avoid heavy taxation. Determine what markets you will choose to invest in and why. 

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* It is often said that money markets are not used to get rich, but to avoid being poor. Do you agree or disagree with this statement? Provide support for your opinion. Which markets do you prefer? Explain why.

I agree only to a limited extent that the money markets are not used to get rich but to avoid being poor. The reason for this is that money market consists of short-term debt securities. These include bankers' acceptances, commercial paper, negotiable certificates of deposit, repos, and many other short term securities. The reason why these help avoid getting poor is that these are very low risk instruments. So, if a person invests in these his funds would be secure and the risk of losing money is minimal. On the other hand the drawback is that money market has short-term securities. Normally, a person would prefer investments for a longer period of time. For instance, I would prefer investing in bonds.

* Why are junk bonds perceived as offering high returns with high risk? Which of the numerous risks ...

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