Question 1

Mezzanine debt funds hold quite __________ assets issued by __________ companies.

Accepted Answer

A)  risky; small to midsized 
B)  risky; large 
C)  safe; small to midsized 
D)  safe; large 
A)  risky; small to midsized 
B)  risky; large 
C)  safe; small to midsized 
D)  safe; large

Question 2

A type of life insurance with separate pure-insurance and savings components is

Accepted Answer

A)  whole life insurance. 
B)  universal life insurance. 
C)  term life insurance. 
D)  group life insurance. 
A)  whole life insurance. 
B)  universal life insurance. 
C)  term life insurance. 
D)  group life insurance.

Question 3

By requiring minimum reporting, disclosure, vesting, funding, and investment standards, the __________ helps safeguard employee pension rights.

Accepted Answer

A)  Employee Retirement Income Security Act 
B)  Federal Deposit Insurance Corporation 
C)  Social Security Act 
D)  Federal Reserve 
A)  Employee Retirement Income Security Act 
B)  Federal Deposit Insurance Corporation 
C)  Social Security Act 
D)  Federal Reserve

Question 4

Mutual funds that offer shares that are redeemable are referred to as

Accepted Answer

A)  open-end. 
B)  closed-end. 
C)  negotiable. 
D)  nonnegotiable. 
A)  open-end. 
B)  closed-end. 
C)  negotiable. 
D)  nonnegotiable.

Question 5

Investment banks operate in the

Accepted Answer

A)  secondary market. 
B)  primary market. 
C)  syndicated market. 
D)  money market. 
A)  secondary market. 
B)  primary market. 
C)  syndicated market. 
D)  money market.

Question 6

Property and casualty insurance companies are supervised and regulated by the

Accepted Answer

A)  Federal Home Loan Bank Board. 
B)  Securities and Exchange Commission. 
C)  states in which they operate. 
D)  Federal Reserve. 
A)  Federal Home Loan Bank Board. 
B)  Securities and Exchange Commission. 
C)  states in which they operate. 
D)  Federal Reserve.

Question 7

Which of the following would likely be involved in a new bond offering?

Accepted Answer

A)  a commercial bank 
B)  an investment bank 
C)  a broker 
D)  a dealer 
A)  a commercial bank 
B)  an investment bank 
C)  a broker 
D)  a dealer

Question 8

Mutual funds that offer limited shares that are not redeemable are referred to as

Accepted Answer

A)  open-end. 
B)  closed-end. 
C)  negotiable. 
D)  nonnegotiable. 
A)  open-end. 
B)  closed-end. 
C)  negotiable. 
D)  nonnegotiable.

Question 9

Compared with the average man, the average woman pays

Accepted Answer

A)  less for health insurance but more for life insurance. 
B)  less for life insurance but more for health insurance. 
C)  more for life and health insurance. 
D)  less for life and health insurance. 
A)  less for health insurance but more for life insurance. 
B)  less for life insurance but more for health insurance. 
C)  more for life and health insurance. 
D)  less for life and health insurance.

Question 10

Which of the following types of insurance do men pay lower premiums than do women?

Accepted Answer

A)  life insurance 
B)  health insurance 
C)  auto insurance 
D)  There are no legally allowed differences. 
A)  life insurance 
B)  health insurance 
C)  auto insurance 
D)  There are no legally allowed differences.

Question 11

Because women have a longer average life span than men, they are paid

Accepted Answer

A)  higher monthly retirement benefits by a defined benefit pension plan. 
B)  lower monthly retirement benefits by a defined benefit pension plan. 
C)  the same monthly retirement benefits by a defined benefit pension plan. 
D)  the amount of monthly benefits paid to men and women by a defined benefit plan is determined by each company. 
A)  higher monthly retirement benefits by a defined benefit pension plan. 
B)  lower monthly retirement benefits by a defined benefit pension plan. 
C)  the same monthly retirement benefits by a defined benefit pension plan. 
D)  the amount of monthly benefits paid to men and women by a defined benefit plan is determined by each company.

Question 12

An Oldsmobile dealer may turn to a __________ like GMAC for loans in purchasing vehicles for his inventory.

Accepted Answer

A)  investment bank 
B)  broker-dealer 
C)  bootstrap financing company 
D)  captive finance company 
A)  investment bank 
B)  broker-dealer 
C)  bootstrap financing company 
D)  captive finance company

Question 13

The two major types of finance company are

Accepted Answer

A)  captive and specialty. 
B)  public and private. 
C)  consumer and commercial. 
D)  insured and uninsured. 
A)  captive and specialty. 
B)  public and private. 
C)  consumer and commercial. 
D)  insured and uninsured.

Question 14

Pension funds are partially guaranteed by the

Accepted Answer

A)  Social Security Administration. 
B)  Federal Deposit Insurance Corporation. 
C)  Federal Reserve. 
D)  Pension Benefit Guaranty Corporation. 
A)  Social Security Administration. 
B)  Federal Deposit Insurance Corporation. 
C)  Federal Reserve. 
D)  Pension Benefit Guaranty Corporation.

Question 15

Management structures that include money market funds and bond funds in addition to stock funds are known as

Accepted Answer

A)  exchange-traded funds. 
B)  dealers. 
C)  brokers. 
D)  families of mutual funds. 
A)  exchange-traded funds. 
B)  dealers. 
C)  brokers. 
D)  families of mutual funds.

Question 16

Finance companies are the largest issuers of

Accepted Answer

A)  commercial paper. 
B)  shares. 
C)  long-term securities. 
D)  repurchase agreements. 
A)  commercial paper. 
B)  shares. 
C)  long-term securities. 
D)  repurchase agreements.

Question 17

A stock life insurance company is owned and controlled by its

Accepted Answer

A)  partners. 
B)  managers. 
C)  stockholders. 
D)  policyholders. 
A)  partners. 
B)  managers. 
C)  stockholders. 
D)  policyholders.

Question 18

A portfolio manager for a property and casualty insurance company who anticipates a recession is likely to shift the company's portfolio into

Accepted Answer

A)  short-term securities. 
B)  preferred stock. 
C)  common stock. 
D)  long-term corporate bonds. 
A)  short-term securities. 
B)  preferred stock. 
C)  common stock. 
D)  long-term corporate bonds.

Question 19

A leveraged buyout is

Accepted Answer

A)  a form of short-term lending to finance companies when they buy a company. 
B)  the acquisition of a company financed by debt. 
C)  the sale of commercial paper to finance purchases of bundles of securitized non-traded loans. 
D)  borrowing by finance companies to make loans. 
A)  a form of short-term lending to finance companies when they buy a company. 
B)  the acquisition of a company financed by debt. 
C)  the sale of commercial paper to finance purchases of bundles of securitized non-traded loans. 
D)  borrowing by finance companies to make loans.

Question 20

__________ contributions to a defined __________ pension plan are tax-deferred until retirement.

Accepted Answer

A)  Employer; benefit 
B)  Employer; contribution 
C)  Employee; benefit 
D)  Employee; contribution 
A)  Employer; benefit 
B)  Employer; contribution 
C)  Employee; benefit 
D)  Employee; contribution

Exam 13: Nondepository Financial Institutions

Mezzanine debt funds hold quite __________ assets issued by __________ companies.

A type of life insurance with separate pure-insurance and savings components is

By requiring minimum reporting, disclosure, vesting, funding, and investment standards, the __________ helps safeguard employee pension rights.

Mutual funds that offer shares that are redeemable are referred to as

Investment banks operate in the

Property and casualty insurance companies are supervised and regulated by the

Which of the following would likely be involved in a new bond offering?

Mutual funds that offer limited shares that are not redeemable are referred to as

Compared with the average man, the average woman pays

Which of the following types of insurance do men pay lower premiums than do women?

Because women have a longer average life span than men, they are paid

An Oldsmobile dealer may turn to a __________ like GMAC for loans in purchasing vehicles for his inventory.

The two major types of finance company are

Pension funds are partially guaranteed by the

Management structures that include money market funds and bond funds in addition to stock funds are known as

Finance companies are the largest issuers of

A stock life insurance company is owned and controlled by its

A portfolio manager for a property and casualty insurance company who anticipates a recession is likely to shift the company's portfolio into

A leveraged buyout is

__________ contributions to a defined __________ pension plan are tax-deferred until retirement.

Introducing Money, Banking, and Financial Markets

The Role of Money in the Macroeconomy

Financial Instruments, Markets, and Institutions

Interest Rate Measurement and Behavior

The Term and Risk Structure of Interest Rates

The Structure and Performance of Securities Markets

The Pricing of Risky Financial Assets

Money and Capital Markets

Demystifying Derivatives

Understanding Foreign Exchange

The Nature of Financial Intermediation

Depository Financial Institutions

Understanding Financial Contracts

The Regulation of Markets and Institutions

Financial System Design

Who's in Charge Here?

Bank Reserves and the Money Supply

The Instruments of Central Bankin

Understanding Movements in Bank Reserves

Monetary Policy Strategy

The Classical Foundations

The Keynesian Framework

The ISLM World

Money and Economic Stability in the ISLM World

An Aggregate Supply and Demand Perspective on Money and Economic Stability

Rational Expectations: Theory and Policy Implications

Empirical Evidence on the Effectiveness of Monetary Policy

Tying It All Together

Filters

Mezzanine debt funds hold quite assets issued by companies.

contributions to a defined pension plan are tax-deferred until retirement.