1)

the Insuring agency for S&L is the:

A) Securities and Exchange Commision (SEC).

B) Federal Deposit Insurance Coporation (FDIC)

C) U.S. Treasury.

D) Savings Association Insurance Fund (SAIF

2)

Adjustable-rate mortgages______ the adverse impact of rising interest rates on a typical savings institution's spread. They ______ the favorable impact of declining interest rates on the spread.

A) reduce; reduce

B) reduce; increase

C) increase; increase

D) increase; reduce

3)

to measure ________ risk, some SIs measure the duration of their respective assets and liabilities.

A) credit

B) interest rate

C) liquidity

D) none of these

4)

when a savings institution uses interest rate swaps to hedge interest rate risk, it would likely exchange ______ outflows for ______ inflows.

A)Vairable-rate; fixed-rate

B)vairable-rate; variable-rate

C)fixed-rate; variable-rate

D)fixed-rate; fixed-rate

5)

The financial institutions reform, recover, and enforcement Act (FIRREA) prohibited:

A) S&L from merging.

B) commercial banks from aquiring S&Ls.

C)S&Ls from investing in junk bonds.

D) S&Ls from making loans to foreign governments.

6)

the ______ acts as a temporary lender to credit unions.

A) world bank

B) central liquidity facility

C) federal home loan bank

D) national credit union administration

7)

the sensitivity of cost of funds to interst rate movments has been:

a)greater for credit unions than for savings institutions

b)greater for credit unions than for commercial banks

c) lower for credit unions than for savings institutions or commercial banks

d) similiar for credit unions as savings institutions and commercial banks

8)

when comparing credit unions with commercial banks and savings insitutions:

A) credit unions are less able to quickly generate additional deposits

b) savings institutions and commercial banks can borrow from the central liquidity facility but credit unions cannot

c)savings institutions and commercial banks are less able to quickly generate additional deposits.

d)credit unions have less exposure to liquidity risk .

9)

the majority of maturities on consumer loans offered by credit unions are ____ term, causing income generated on their asset portfolio to be _____ to interest rate movments.

a) long; insensitive

b)short or medium; sensitive

c)long; sensitive

d)short or medium; insensitive

10)

when a finance company's assets are _____ interest rate-sensitive than its liabilites and when interest rates are expected to _______, bonds can provide long-term financing at a rate that is completely insulated from rising market rates.

a) less; increase

b)less; decrease

c)more; increase

d)more;decrease

11)

finance companies differ from commercial banks, savings institutions, and credit unions in that they:

a) normally do not obtain funds from deposits.

b)focus on financing acquisitions by companies.

c)focus on providing residential mortgages.

d)use most of their funds to purchase stocks.

12)

when finance companies purchase a firm's receivables at a discount, and are responsible for processing and collecting the balances of these accounts, they act as a:

a) leasing agent

b) lessor

c) lessee

d) factor

13)

when a finance company purchases equipment for use by another business, the finance company provides financing in the form of:

a) factoring

b)leasing

c)a bankers acceptance

d)a letter of credit

14

a wholly owned susidiary whos primary purpose is to finance sales of the parent company's products and services, provide wholesale financing to distributors of teh parent company's products, and purchase receivables of the parent company is a:

a) captive finance subsidary

b)factor

c)leasing agent

d) captive factoring agent

15

no-load mutual funds are normally promoted by ______. load funds are promoted by _______.

a) registered representatives of a brokerage firm; registered representatives of a brokerage firm

b)registered representatives of a brokerage firm; the mutual fund of concern

c) the mutual fund of concern; registered represenatives of a brokerage firm

d) the mutual fund of concern; the mutual fund of concern

16

to cover mangerial expenses, mutual funds typically charge:

a) managment fees of 1 to 2 percent of total assets per year.

b)commissions of typically 8 to 10 percent of transaction market value per year.

c)managment fees of typically more than 10 percent of total assets per year

d)commisions of typcially 3 to 5 percent of transaction market value per year.

17

which of the following is not disclosed in the prospectus?

a) the minimum amount of investment required

b) the investment objective of the funds

c)the fees incurred by the mutual funds

d) all of these are disclosed in the prospectus

18

when an interest rates decline, investors who want to earn a high return may tend to _______ their investment in stock mutual funds, and ______ deposits in depository institutions.

a)reduce; reduce

b)reduce;increase

c)increase; reduce

d)increase; increase

19

according to SEC regulations, the majority of the members on a mutual fund's board of directors must be:

a)employed by the fund

b)outsiders (not employed by the fund)

c)certified public accountants

d)certified financial analysis

20

an expense ratio represents _______ divided by the fund's ______

a) annual fees charged to investors; 12b-1 fee

b)annual fees charged to investors; net asset value

c) initial sales charge (load); 12b-1 fees

d) initial sales charge (lad); net asset value

21

funds that are designed to mimic particular stock indexes and are traded on a stock exchange are known as:

a) index mutual funds

b)exchange-traded funds

c) money market funds

22

investment banking firms focus on _______ market services; brokerage firms focus on _______ market services.

a) primary; primary

b) secondary; primary

c)primary; secondary

d)secondary; secondary

23

the_______ regulates the issurance of securities

a)securities and exchange commision

b) national association of securities dealers

c) federal reserve board

d) securities investor protection corporation

24

all information relevant to the security, as well as the agreement between the issuer and the investment banking firm, must be provided in the:

a) origination

b)registration

c)best-efforts agreement

d)none of these

25

asset-stripping refers to:

a)acquiring shares in a firm, causing the firm to repurchase the shares at a premium to prevent a takeover

b)financing provided by investment banking firms to help support a acquisition.

c)investing in the shares of a firm that is anticipated to experience a leveraged buyout (LPO)

d)acquiring a firm and selling off individual divisions of the firm separtely.

26

greenmail refers to:

a) acquiring sharis in a firm, causing the firm to repurchase the shares at a premium to prevent a takeover.

b)financing provided by investment banking firms to help support an acquisition.

c)investing in the shares of a firm that is anticpated to experience a leveraged buyout (LPO)

d)acquiring a firm and selling off individual divisions of the firm seperately.