1. If an investment bank offers both underwriting/distribution functions and investment advisory or management functions, which situation would be acceptable under U.S. Securities and Exchange regulations and ethics guidelines with regard to material non-public information (MNPI)?
   1. Allowing MNPI acquired in the sell side of the business to influence the recommendations made by the buy side of the business.
   2. Trading of personal securities based on MNPI available only to the buy side of the business and not to the sell side due to a "wall."
   3. "Bringing someone over the wall" to provide value to underwriting, who does not comment on MNPI until it has been made public.
   4. Acquiring MNPI in the buy side of the business and disseminating it to the sell side of the business.

1. Which of the following is true of the current state of financial regulation for financial institutions (FIs)?

1. 1. Most banks can transfer risk on a greater scale and in more complex ways than before.
   2. Most FIs now conduct virtual global business, reducing the influence of very large FIs.
   3. Most global financial money and capital markets are deliberately disconnected.
   4. Most securities exchanges have required majority ownership by resident nationals.

1. The Depository Trust and Clearing Corporation (DTCC)
2. 1. 1. primarily provides custody and asset servicing for securities issues from outside the United States.
      2. brings efficiency by netting transactions between brokers, dealers, mutual funds, insurance companies and other large investors.
      3. brings efficiency by acting as an indirect holder of most stock and bond certificates via the commercial book-entry system (CBES).
      4. has three tiers, one for the U.S. Federal Reserve, one for depository institutions and one for brokers, dealers and others who hold accounts for individual investors.

1. Which do factors and insurance companies have in common?
2. 1. 1. Both are primary participants in money market mutual funds (MMMFs)
      2. Both are federally or state chartered as commercial banks in the U.S.
      3. Both allow extending credit to customers without putting a firm directly at risk
      4. Both are nonbank financial institutions