Question 1

Securities brokers and dealers,investment banks,and organized exchanges ________.

Accepted Answer

A)  do not perform the intermediation function 
B)  can be thought of as "financial facilitators" 
C)  are important in the process of channelling funds from savers to spenders 
D)  All of the above 
A)  do not perform the intermediation function 
B)  can be thought of as "financial facilitators" 
C)  are important in the process of channelling funds from savers to spenders 
D)  All of the above

Question 2

The Business Development Bank of Canada raises money by ________.

Accepted Answer

A)  issuing notes in domestic and foreign financial markets 
B)  selling shares in domestic capital markets 
C)  selling shares in foreign capital markets 
D)  borrowing from the federal government 
A)  issuing notes in domestic and foreign financial markets 
B)  selling shares in domestic capital markets 
C)  selling shares in foreign capital markets 
D)  borrowing from the federal government

Question 3

Group life insurance ________.

Accepted Answer

A)  is sold to a single person under a group policy 
B)  is sold to a single person under a single policy 
C)  is sold to a group of people under a group policy 
D)  is sold to a group of people under a single policy 
A)  is sold to a single person under a group policy 
B)  is sold to a single person under a single policy 
C)  is sold to a group of people under a group policy 
D)  is sold to a group of people under a single policy

Question 4

What are three suggestions given for privatizing public pension plans?

Accepted Answer

1.Government investment of trust fund as

Question 5

The Greek debt crisis increased ________.

Accepted Answer

A)  credit default swap spreads 
B)  the value of eurodollar accounts 
C)  the credit rating of Greek corporations 
D)  the TSE index 
A)  credit default swap spreads 
B)  the value of eurodollar accounts 
C)  the credit rating of Greek corporations 
D)  the TSE index

Question 6

Mutual funds were created ________.

Accepted Answer

A)  in order to provide insurance to all households 
B)  in order to limit interest rates that are paid on deposits 
C)  to pool the savings of small investors and use the proceeds to invest on their behalf 
D)  Only A and B of the above 
A)  in order to provide insurance to all households 
B)  in order to limit interest rates that are paid on deposits 
C)  to pool the savings of small investors and use the proceeds to invest on their behalf 
D)  Only A and B of the above

Question 7

Which of the following is likely to occur if lawsuits involving Property and Casualty insurance and amounts awarded rise dramatically?

Accepted Answer

A)  Insurance companies leave premiums unchanged 
B)  Insurance companies would raise premiums 
C)  Insurance companies hold less liquid assets to earn more income 
D)  Insurance companies keep insurance rates low 
A)  Insurance companies leave premiums unchanged 
B)  Insurance companies would raise premiums 
C)  Insurance companies hold less liquid assets to earn more income 
D)  Insurance companies keep insurance rates low

Question 8

The primary assets of a pension fund are ________.

Accepted Answer

A)  money market instruments 
B)  bonds, stock and long term mortgages 
C)  consumer and business loans 
D)  bonds, stock and short term mortgages 
A)  money market instruments 
B)  bonds, stock and long term mortgages 
C)  consumer and business loans 
D)  bonds, stock and short term mortgages

Question 9

Which of the following is an example of permanent life insurance?

Accepted Answer

A)  The policy has no the cash value. 
B)  It provides an annuity until death. 
C)  The premium is constant through the life of the policy. 
D)  The premium is matched every year to the amount needed to match against death. 
A)  The policy has no the cash value. 
B)  It provides an annuity until death. 
C)  The premium is constant through the life of the policy. 
D)  The premium is matched every year to the amount needed to match against death.

Question 10

________ policies have a cash value which the policyholder can claim by cancelling the policy.

Accepted Answer

A)  Endowment insurance 
B)  Term life insurance 
C)  Permanent insurance 
D)  Annuity insurance 
A)  Endowment insurance 
B)  Term life insurance 
C)  Permanent insurance 
D)  Annuity insurance

Question 11

Sales finance companies compete directly with banks for ________.

Accepted Answer

A)  business loans 
B)  credit lines 
C)  consumer loans 
D)  deposit accounts 
A)  business loans 
B)  credit lines 
C)  consumer loans 
D)  deposit accounts

Question 12

When a firm issuing new securities has previously issued securities,these previously issued securities are called ________.

Accepted Answer

A)  investment-grade issues 
B)  seasoned issues 
C)  an initial public offering 
D)  secondary issues 
A)  investment-grade issues 
B)  seasoned issues 
C)  an initial public offering 
D)  secondary issues

Question 13

A financial institution that assists in the sale of securities in the primary market is the ________.

Accepted Answer

A)  investment bank 
B)  commercial bank 
C)  stock exchange 
D)  brokerage house 
A)  investment bank 
B)  commercial bank 
C)  stock exchange 
D)  brokerage house

Question 14

Demutualization refers to ________.

Accepted Answer

A)  the conversion of mutual insurance companies from being owned by policy holders to stock holders 
B)  the conversion of mutual fund companies from being owned by policy holders to stock holders 
C)  the conversion of insurance companies from being owned by stock holders to policy holders 
D)  the conversion of mutual fund companies from being owned by stock holders to policy holders 
A)  the conversion of mutual insurance companies from being owned by policy holders to stock holders 
B)  the conversion of mutual fund companies from being owned by policy holders to stock holders 
C)  the conversion of insurance companies from being owned by stock holders to policy holders 
D)  the conversion of mutual fund companies from being owned by stock holders to policy holders

Question 15

Money-market mutual funds invest in ________.

Accepted Answer

A)  stocks 
B)  bonds 
C)  short-term debt 
D)  short and long-term debt 
A)  stocks 
B)  bonds 
C)  short-term debt 
D)  short and long-term debt

Question 16

Consumer finance companies typically make loans to consumers for all of the following except to ________.

Accepted Answer

A)  buy particular items such as furniture or home appliances 
B)  to make home improvements 
C)  purchase accounts receivables at a discount 
D)  refinance small debts 
A)  buy particular items such as furniture or home appliances 
B)  to make home improvements 
C)  purchase accounts receivables at a discount 
D)  refinance small debts

Question 17

Institutional funds can be a concern because they ________.

Accepted Answer

A)  have no clout with corporate boards 
B)  control a large share of total financial assets 
C)  lead to lower interest rates 
D)  include individuals between 50 and 70 
A)  have no clout with corporate boards 
B)  control a large share of total financial assets 
C)  lead to lower interest rates 
D)  include individuals between 50 and 70

Question 18

Personal pension plans ________.

Accepted Answer

A)  are different from RRSPs 
B)  cannot be converted to annuity or a RRIF on retirement 
C)  provide tax-sheltered, self-financed retirement funds 
D)  are government-administered 
A)  are different from RRSPs 
B)  cannot be converted to annuity or a RRIF on retirement 
C)  provide tax-sheltered, self-financed retirement funds 
D)  are government-administered

Question 19

Brokerage firms engage in all of the following securities market activities except for acting as ________.

Accepted Answer

A)  brokers 
B)  dealers 
C)  central bankers 
D)  investment bankers 
A)  brokers 
B)  dealers 
C)  central bankers 
D)  investment bankers

Question 20

To provide loans to new and established farmers for any agricultural or farm-related operation the government has created ________.

Accepted Answer

A)  Farm Debit Canada 
B)  Farm Credit Canada 
C)  Farm Export Development Canada 
D)  Canada Farming Corporation 
A)  Farm Debit Canada 
B)  Farm Credit Canada 
C)  Farm Export Development Canada 
D)  Canada Farming Corporation

Exam 12: Nonbank Finance

Securities brokers and dealers,investment banks,and organized exchanges ________.

The Business Development Bank of Canada raises money by ________.

Group life insurance ________.

What are three suggestions given for privatizing public pension plans?

The Greek debt crisis increased ________.

Mutual funds were created ________.

Which of the following is likely to occur if lawsuits involving Property and Casualty insurance and amounts awarded rise dramatically?

The primary assets of a pension fund are ________.

Which of the following is an example of permanent life insurance?

________ policies have a cash value which the policyholder can claim by cancelling the policy.

Sales finance companies compete directly with banks for ________.

When a firm issuing new securities has previously issued securities,these previously issued securities are called ________.

A financial institution that assists in the sale of securities in the primary market is the ________.

Demutualization refers to ________.

Money-market mutual funds invest in ________.

Consumer finance companies typically make loans to consumers for all of the following except to ________.

Institutional funds can be a concern because they ________.

Personal pension plans ________.

Brokerage firms engage in all of the following securities market activities except for acting as ________.

To provide loans to new and established farmers for any agricultural or farm-related operation the government has created ________.

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

What Is Money

Understanding Interest Rates

The Behaviour of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Banking and the Management of Financial Institutions

Risk Management With Financial Derivatives

Central Banks and the Bank of Canada

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation, and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

The ISLM Model

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