Question 1

The recent financial crisis highlighted, in retrospect, how heavily households and businesses had come to rely on FIs to act as specialists in

Accepted Answer

A) generating profits and lowering costs. 
B) risk measurement and management. 
C) investment advice and brokerage services. 
D) time intermediation and denomination mediation. 
E) derivative securities and interbank borrowing. 
A) generating profits and lowering costs. 
B) risk measurement and management. 
C) investment advice and brokerage services. 
D) time intermediation and denomination mediation. 
E) derivative securities and interbank borrowing.

Question 2

Deposit-taking financial institutions include all of the following EXCEPT

Accepted Answer

A) commercial banks. 
B) savings and loans institutions 
C) investment banks. 
D) credit unions. 
E) all of these are deposit-taking institutions. 
A) commercial banks. 
B) savings and loans institutions 
C) investment banks. 
D) credit unions. 
E) all of these are deposit-taking institutions.

Question 3

Time intermediation involves the investment of small amounts by investors into mutual funds that invest in long-term securities such as stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 4

Firms in industries that have low costs of entry tend to enjoy larger profits than firms in industries with high costs of entry.

Accepted Answer

A) True 
 B)False

Question 5

As an asset transformer, the FI issues financial claims that are more attractive to household savers than the claims directly issued by corporations.

Accepted Answer

A) True 
 B)False

Question 6

The passage of legislation to ensure that FIs are meeting the needs of their local communities is an example of entry regulation.

Accepted Answer

A) True 
 B)False

Question 7

Nondeposit-taking financial institutions are represented by all of the following EXCEPT

Accepted Answer

A) insurance companies. 
B) mutual funds. 
C) finance companies. 
D) credit unions. 
E) securities firms. 
A) insurance companies. 
B) mutual funds. 
C) finance companies. 
D) credit unions. 
E) securities firms.

Question 8

The asset transformation function of an FI is to issue primary financial claims to corporations while purchasing primary claims issued by households and other investors.

Accepted Answer

A) True 
 B)False

Question 9

Traditionally, regulation of FIs in Canada has been

Accepted Answer

A) minimal, as evidenced by the recent financial crisis. 
B) extensive, as a result of the importance of FIs to the economy. 
C) minimal, because the free market is allowed to allocate financial resources. 
D) extensive, because banks have monopoly power. 
E) no different from regulation of nonfinancial firms. 
A) minimal, as evidenced by the recent financial crisis. 
B) extensive, as a result of the importance of FIs to the economy. 
C) minimal, because the free market is allowed to allocate financial resources. 
D) extensive, because banks have monopoly power. 
E) no different from regulation of nonfinancial firms.

Question 10

The federal government has traditionally extended safety nets to DTIs consisting of

Accepted Answer

A) deposit insurance, central bank borrowing, and reserve requirements. 
B) deposit insurance and borrowing from the Bank of Canada. 
C) deposit insurance, unemployment insurance, and borrowing from the bank of Canada. 
D) deposit insurance, open market operations, and borrowing from the Bank of Canada. 
E) deposit insurance protection. 
A) deposit insurance, central bank borrowing, and reserve requirements. 
B) deposit insurance and borrowing from the Bank of Canada. 
C) deposit insurance, unemployment insurance, and borrowing from the bank of Canada. 
D) deposit insurance, open market operations, and borrowing from the Bank of Canada. 
E) deposit insurance protection.

The recent financial crisis highlighted, in retrospect, how heavily households and businesses had come to rely on FIs to act as specialists in

Deposit-taking financial institutions include all of the following EXCEPT

Time intermediation involves the investment of small amounts by investors into mutual funds that invest in long-term securities such as stocks and bonds.

Firms in industries that have low costs of entry tend to enjoy larger profits than firms in industries with high costs of entry.

As an asset transformer, the FI issues financial claims that are more attractive to household savers than the claims directly issued by corporations.

The passage of legislation to ensure that FIs are meeting the needs of their local communities is an example of entry regulation.

Nondeposit-taking financial institutions are represented by all of the following EXCEPT

The asset transformation function of an FI is to issue primary financial claims to corporations while purchasing primary claims issued by households and other investors.

Traditionally, regulation of FIs in Canada has been

The federal government has traditionally extended safety nets to DTIs consisting of

Deposit-Taking Institutions

Finance Companies

Securities, Brokerage, and Investment Banking

Mutual Funds, Hedge Funds, and Pension Funds

Insurance Companies

Risks of Financial Institutions

Interest Rate Risk I

Interest Rate Risk II

Credit Risk: Individual Loans

Credit Risk: Loan Portfolio and Concentration Risk

Liquidity Risk

Foreign Exchange Risk

Sovereign Risk

Market Risk

Off-Balance-Sheet Risk

Technology and Other Operational Risks

Liability and Liquidity Management

Deposit Insurance and Other Liability Guarantees

Capital Adequacy

Product and Geographic Expansion

Futures and Forwards

Options, Caps, Floors, and Collars

Swaps

Loan Sales

Securitization Index

Filters

Exam 1: Why Are Financial Institutions Special

The recent financial crisis highlighted, in retrospect, how heavily households and businesses had come to rely on FIs to act as specialists in

Deposit-taking financial institutions include all of the following EXCEPT

Time intermediation involves the investment of small amounts by investors into mutual funds that invest in long-term securities such as stocks and bonds.

Firms in industries that have low costs of entry tend to enjoy larger profits than firms in industries with high costs of entry.

As an asset transformer, the FI issues financial claims that are more attractive to household savers than the claims directly issued by corporations.

The passage of legislation to ensure that FIs are meeting the needs of their local communities is an example of entry regulation.

Nondeposit-taking financial institutions are represented by all of the following EXCEPT

The asset transformation function of an FI is to issue primary financial claims to corporations while purchasing primary claims issued by households and other investors.

Traditionally, regulation of FIs in Canada has been

The federal government has traditionally extended safety nets to DTIs consisting of

Deposit-Taking Institutions

Finance Companies

Securities, Brokerage, and Investment Banking

Mutual Funds, Hedge Funds, and Pension Funds

Insurance Companies

Risks of Financial Institutions

Interest Rate Risk I

Interest Rate Risk II

Credit Risk: Individual Loans

Credit Risk: Loan Portfolio and Concentration Risk

Liquidity Risk

Foreign Exchange Risk

Sovereign Risk

Market Risk

Off-Balance-Sheet Risk

Technology and Other Operational Risks

Liability and Liquidity Management

Deposit Insurance and Other Liability Guarantees

Capital Adequacy

Product and Geographic Expansion

Futures and Forwards

Options, Caps, Floors, and Collars

Swaps

Loan Sales

Securitization Index

Filters