Question 1

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 debtsE) C) and D)
F) A) and C)

Question 2

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.E) All of the above
F) B) and D)

Question 3

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 aboveE) A) and C)
F) C) and D)

Question 4

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 bankersE) A) and B)
F) B) and C)

Question 5

Sales finance companies compete directly with banks for ________.

Accepted Answer

A)   business loans
B)   credit lines
C)   consumer loans
D)   deposit accountsE) None of the above
F) B) and C)

Question 6

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 houseE) C) and D)
F) B) and C)

Question 7

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 policyE) B) and C)
F) B) and D)

Question 8

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 lowE) A) and B)
F) A) and C)

Question 9

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 70E) B) and D)
F) B) and C)

Question 10

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 aboveE) A) and D)
F) A) and B)

Question 11

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 governmentE) A) and D)
F) A) and B)

Question 12

________ 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 insuranceE) A) and B)
F) A) and C)

Question 13

Money-market mutual funds invest in ________.

Accepted Answer

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

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 holdersE) A) and B)
F) A) and C)

Question 15

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 issuesE) A) and B)
F) B) and D)

Question 16

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 CorporationE) B) and D)
F) A) and D)

Question 17

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 indexE) A) and D)
F) B) and D)

Question 18

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 mortgagesE) A) and D)
F) None of the above

Question 19

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-administeredE) B) and C)
F) A) and D)

Question 20

What are three suggestions given for privatizing public pension plans?

Accepted Answer

1.Government investment of trust fund as...

Exam 12: Nonbank Finance

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

Correct AnswerverifiedShow Answer

The primary assets of a pension fund are ________.

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Group life insurance ________.

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Personal pension plans ________.

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The Business Development Bank of Canada raises money by ________.

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

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Sales finance companies compete directly with banks for ________.

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Mutual funds were created ________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Demutualization refers to ________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Institutional funds can be a concern because they ________.

Correct AnswerverifiedShow Answer

Money-market mutual funds invest in ________.

Correct AnswerverifiedShow Answer

What are three suggestions given for privatizing public pension plans?

Correct Answerverified1.Government investment of trust fund as...View AnswerShow Answer

The Greek debt crisis increased ________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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1.Government investment of trust fund as...
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