Series 7 Exam Question 387: Answer and Explanation

Question: 387

A quote of 1.20 bid 1.18 offered is most likely a quote on which of the following:

• A. A T-bond
• B. A T-bill
• C. A general obligation (GO) bond
• D. A Fannie Mae (FNMA) bond

Correct Answer: B

Explanation:

B. If you want to pass the Series 7 exam, you have to know your quotes. The correct answer is Choice (B) because it's the only discounted instrument, and discounted instruments (such as T-bills) are quoted on a discount yield basis.