Financial Institutions, Instruments and Markets 9th Edition by Christopher Viney Test bank

Section: 1.02 The financial system and financial institutions
Topic: The financial system and financial institutions


 
14. A financial intermediary that receives premium payments which are used to purchase assets to cover future possible payments is a:
A. building society.
B. credit union.
C. savings bank.
D. life insurance office.
Ans: D
AACSB: Reflective thinking
Bloom's: Evaluation
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.02 Explain the functions of a modern financial system and categorise the main types of financial institutions, including depository financial institutions, investment banks, contractual savings institutions, finance companies and unit trusts.
Section: 1.02 The financial system and financial institutions
Topic: The financial system and financial institutions


 
15. Financial institutions whose liabilities specify that, in return for the payment of periodic funds to the institution, the institution will make payments in the future (if and when a specified event occurs) are:
A. money market corporations.
B. unit trusts.
C. contractual savings institutions.
D. depository financial institutions.
Ans: C
AACSB: Communication
Bloom's: Knowledge
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.02 Explain the functions of a modern financial system and categorise the main types of financial institutions, including depository financial institutions, investment banks, contractual savings institutions, finance companies and unit trusts.
Section: 1.02 The financial system and financial institutions
Topic: The financial system and financial institutions


 
16. Financial institutions that raise the majority of their funds by selling securities in the money markets are:
A. commercial banks.
B. building societies.
C. finance companies.
D. life insurance offices.
Ans: C
AACSB: Communication
Bloom's: Knowledge
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.02 Explain the functions of a modern financial system and categorise the main types of financial institutions, including depository financial institutions, investment banks, contractual savings institutions, finance companies and unit trusts.
Section: 1.02 The financial system and financial institutions
Topic: The financial system and financial institutions


 
17. Financial institutions that are formed under a trust deed and attract funds by inviting the public to buy units are:
A. finance companies
B. building societies.
C. unit trusts.
D. life insurance offices.
Ans: C
AACSB: Reflective thinking
Bloom's: Synthesis
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.02 Explain the functions of a modern financial system and categorise the main types of financial institutions, including depository financial institutions, investment banks, contractual savings institutions, finance companies and unit trusts.
Section: 1.02 The financial system and financial institutions
Topic: The financial system and financial institutions


 
18. Which of the following is NOT a term associated with shares?
A. Residual
B. Ownership
C. Voting rights
D. Contractual claim
Ans: D
AACSB: Communication
Bloom's: Comprehension
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.03 Define the main classes of financial instruments that are issued into the financial system, that is, equity, debt, hybrids and derivatives.
Section: 1.03 Financial instruments
Topic: Financial instruments


 
19. Which of the following is NOT a characteristic commonly associated with preference shares?
A. A specified, fixed return
B. No voting rights
C. Higher ranking than bond holders on claims on assets
D. No entitlement to take possession of assets if the borrower defaults on payment
Ans: C
AACSB: Communication
Bloom's: Comprehension
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.03 Define the main classes of financial instruments that are issued into the financial system, that is, equity, debt, hybrids and derivatives.
Section: 1.03 Financial instruments
Topic: Financial instruments


 
20. Long-term debt financing instruments used by companies are called:
A. bills.
B. debentures.
C. shares.
D. equities.
Ans: B
AACSB: Communication
Bloom's: Comprehension
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.03 Define the main classes of financial instruments that are issued into the financial system, that is, equity, debt, hybrids and derivatives.