BM #3
Does a mutual fund pool the money of many investors primarily for the purchase of stocks and bonds?
yes
Due to reductions in regulation, do banks and nonbanks offer many of the same products and services today?
yes
Is NASDAQ the nation's first electronic stock market?
yes
Is a treasury bond the longest-term government security?
yes
Is the Federal Reserve System (the Fed) the central bank of the United States?
yes
Will the Social Security Administration and the Internal Revenue Service directly deposit checks into recipients' bank accounts?
yes
With EFT transactions, can money be transferred by computer?
yes
Do mutual savings banks emphasize long-term loans, such as mortgages, for the local community?
yes
Does a CD have a greater liquidity than a checking account?
yes
Does a bank accept demand deposits as well as make consumer and commercial loans?
yes
The entity that insures credit union deposits is the
A. NCUSIF
The lowest rate of interest at which large banks lend large sums to the best-qualified borrowers is the
A. prime rate
Public corporations that want to sell their stock to investors are listed on
A. stock exchange
Which statement is INCORRECT about CDs?
B. CDs can be purchased for any amount with no minimum
The use of money to make more money is known as
B. an investment
If a bank transfers money in and out of a business's checking account daily with the goal of keeping the balance low and maintaining most funds in higher interest paying accounts until needed, the bank is providing a(n)
B. cash management service
Not-for-profit financial institutions owned by their members are known as
B. credit unions
All of the following are nonbank institutions EXCEPT
B. savings and loan associations
An unsecured loan is one that is not backed by
C. collateral
Which of the following is NOT the name of a stock index?
C. commodities exchange index
With ATMs, bank customers can make
C. deposits and withdrawals and transfer funds
Which transaction CANNOT be handled by EFT?
C. payroll preparation
When the payee signs the back of the check legally transferring ownership, the action is called
D. endorsing
Which service is NOT typically provided by commercial banks?
D. provide venture capital to new entrepreneurs
Which factor should NOT be considered when setting investment goals?
D. reputation
Are commercial loans made to individuals as well as to businesses?
no
Can most skilled investors usually predict when the market will reach its high and low points?
no
Does a certificate of deposit usually earn a lower interest rate than a savings account?
no
Is a promissory note a written order requiring the financial institution to pay previously deposited money to a third party on demand?
no
Is a savings bond a negotiable security?
no
Is the primary purpose of nonbank financial institutions to handle demand deposits, commercial loans, and consumer loans?
no
Are investors who buy stock in newly developed corporations looking for maximum security?
yes
Are treasury instruments short-and-long-term securities sold to finance the cost of running the government?
yes
Can money market fund depositors withdraw funds by writing checks on the account?
yes
Do investors diversify to reduce risk?
yes