Exam 5: Banking and Interest Rates

Savings institutions differ from commercial banks in that they tend to focus less on providing commercial loans.

A ________ is a check that is written on behalf of an individual and will be charged against a large well-known financial institution or credit card sponsor's account.

Which of the following financial institutions specializes in making personal loans to people who are perceived to have a higher risk of default?

A nondepository institution facilitating transactions in stocks or bonds is a(n)________.

The term structure of interest rates is measured by a(n)________,which shows the interest rate offered at each maturity level.

If you were taking out a personal loan,the highest rate would probably be charged by a

Which of the following is not a depository institution?

________ are nondepository institutions that provide insurance to protect individuals or firms against possible adverse events.

Certificates of deposit (CDs)with shorter maturity dates tend to pay higher interest rates than those with longer maturity dates.

A ________ is a check that is written on behalf of a person and will be charged against a nonfinancial institution's account.

Risk premium is the amount of interest you might receive over and above the risk-free return insured by the federal government.

A(n)________ card allows you to pay for a purchase at a later time when the bill arrives.

Since rates and fees differ only slightly between all national banks,there is little need to consider these when choosing your financial institution.

Which of the following financial institutions would be used the most by business customers wishing to borrow money?

You should select only one financial institution for all of your checking,savings,and investing needs.

Investments with a higher risk of default pay higher rates of interest than those which are less risky.

If you have $10,000 that you do not currently need for expenses and you wish to put it somewhere so that it will earn a return,which of the following financial institutions would you not choose?

Which of the following is classified as a nondepository institution?

The one-year loan rate for individuals is usually about the same as the one-year CD rate.

Convenience,deposit rates and insurance,and fees are the primary considerations in choosing a financial institution for your needs.