Exam 16: Exploring Various Aspects of Pension Funds, Finance Companies, and Insurance Industry

Hedge funds are really private partnerships that sell shares to only a limited number of investors.

Ironically, even though finance companies and commercial banks are often direct competitors, many banks own finance companies.

What principal factors influence the premiums that insurers charge their policy-holding customers?

One of the most prominent changes in mutual funds is greater use of derivatives, including:

The financial institution that takes on new loans to finance the building of homes, apartments, office buildings, shopping centers and other structures and, soon after, sells these loans to long-distance lenders is known as a(n):

Using each of the phrases or sentences below, identify the key term or concept used in Chapter 16. a. Financial-service companies supplying various forms of credit to businesses and consumers, whose loan rates often rank among the highest. b. Financial-service firm that assists corporations and governments in raising new funds. c. Places long-term loans with long-term lenders. d. Receive most of their income from real estate transactions. e. Financial-service firms providing access to equipment and other assets to their customers for a stipulated period of time.

Investment company shareholders determine the policy for investing funds followed by each investment company.

An investment company that purchases securities from firms in trouble or those that have filed for bankruptcy in the hope of scoring exceptional returns should the troubled firms recover is known as a reorganization fund.

With universal life insurance policy premium payments can be varied in amount and timing by the policyholder.

With mutual funds using more and more derivatives it has raised regulators concerns about the investor training on derivates.

According to the textbook two areas of growing insurance needs for the future are:

If an insurer contracts with other insurance companies to share some of the risks of insurance underwriting in return for a share of some of the first insurer's premium income this is known as:

The net asset value (NAV) of a mutual fund refers to:

Several state regulatory agencies have restricted life insurance companies from additional purchases of junk bonds.

Recent trends of pursuing smaller investors and more aggressive management of hedge funds has led to:

According to the textbook, private pension plans are more heavily regulated than government pension plans.

The denial of any claims arising from "acts of war" has been a standard exclusion in most insurance policies for many years before the terrorist attacks of September 2001.

The mix of assets held by a pension fund is usually up to the discretion of the fund manager without any significant restrictions.

Pension fund assets are likely to grow rapidly over the next few decades as more workers retire.

A life insurance company's promise to provide long-term mortgage funds to a real estate development before a residential or commercial construction project begins is known as a(n):