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Exam 3: Banks and Other Financial Institutions

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Question 31

Multiple Choice

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Credit unions are

A) for profit organizations.
B) made up of individuals who possess common bonds of association.
C) institutions that derive funds from investment activities.
D) generally larger than most commercial banks.

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Question 32

Multiple Choice

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What is the primary sources of funds for credit unions?

A) Individual savings
B) Premiums paid on policies
C) Employee/employer contributions
D) Other financial institutions

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Question 33

Multiple Choice

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_______________ provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes, whereas ______________ originate mortgage loans on homes and other real property by bringing together borrowers and institutional investors.

The total capital ratio can be computed as total capital divided by total assets times 100.

The Economic Stabilization Act of 2008 had a primary focus of allowing the U.S. Treasury to purchase up to $700 billion of "troubled" or "toxic" assets held by financial institutions.

Our system of national banks

The item on the assets side of a bank's balance sheet that represents the largest proportion of bank assets is

Savings banks have nearly three quarters of their assets in the form of

__________________ are the two important forms of contractual savings organizations.

An unsecured loan represents a general claim against specific assets of the borrower.

Insurance companies receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.

An open-end investment company that can issue an unlimited number of its shares to investors and use the pooled proceeds to purchase corporate and government securities is called a(n)

The principal liabilities of all depository institutions are

In general, the effective rate of interest on a discount loan

Investment banking firms assist individuals to purchase new or existing securities issues or to sell previously purchased securities.

Credit unions are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit.

The Monetary Control Act

The Glass-Steagall Act was repealed with the passage of the Gramm-Leach-Bliley Act of 1999.

An organization that received contributions from employees and/or their employers and invests the proceeds on behalf of the employees for use during their retirement years is called a(n)

__________________ collect premiums on insurance policies and employee/employer contributions from pension fund participants and provide retirement benefits and insurance against major financial losses.