Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securities in which a borrower promises to pay a specified interest rate and principal at a future date. 1) Which of the following statements about Treasury bonds is the most accurate?
a) Treasury bonds are completely riskless.
b) Treasury bonds have a very small amount of default risk, so they are not completely riskless.
c) Treasury bonds are not completely riskless, since their prices will decline when interest rates rise.
Based on the information given in the following statement, answer the questions that follow:
New York City issued a general obligation bond for a canal in 1812. It was the first formal debt instrument with a fixed repayment schedule issued by a city.
1) What type of bonds are these?
a) Treasury bonds
b) Municipal bonds
c) Corporate bonds
2) Who is the issuer of the bonds?
a) The New York City government
b) Bank of New York
c) Federal Reserve Bank of New York

Costco wholesale corporation operates membership warehouses selling food, appliances, consumer electronics, apparel and other household goods at 471 locations across the u.s. as well as in canada, mexico and puerto rico. as of its fiscal year-end 2005, costco had approximately 21.2 million members. selected fiscal-year information from the company's balance sheets follows. ($ millions). selected balance sheet data 2005 2004 merchandise inventories $4,015 $3,644 deferred membership income (liability) 501 454 (a) during fiscal 2005, costco collected $1,120 cash for membership fees. use the financial statement effectstemplate to record the cash collected for membership fees. (b) in 2005, costco recorded $46,347 million in merchandise costs (that is, cost of goods sold). record thistransaction in the financial statement effects template. (c) determine the value of merchandise that costco purchased during fiscal-year 2005. use the financial statementeffects template to record these merchandise purchases. assume all of costco's purchases are on credit.