LUOA Personal Finance Module 2 Questions and Answers Rated A

LUOA Personal Finance Module 2 Questions and Answers Rated A What are the three main types of financial institutions available for helping you manage you finances? banks, credit unions, and thrifts Choose all statements that describe a "bank." -invests in capital markets to make money for the institution as well as its customers -accepts deposits to accounts -regulated by the government -a financial institution -charges fees and interest to pay administrators and stock holders Choose all statements that describe a "credit union." -not for profit -a financial institution -profits and surpluses go to pay administrators and for services for members -member owned -provides services only to its members -accepts deposits to accounts like a bank Choose all statements that describe a "thrift." -a financial institution -mutually held corporations with decisions made by depositors and borrowers -limited by law as to the amount of assets that can be used for commercial loans -also known as a savings and loans association -specializes in making money off mortgages and personal loans to its members Because a bank is federally regulated, what are some of the guidelines used to make sure banks comply to the regulations? Choose all that apply. -a bank is insured by the FDIC and must follow its guidelines in order for its depositors to be covered against loss -a bank has to abide by guidelines set up by the Federal Reserve System -a bank is regulated to make sure it does not lend more money than it can safely cover with assets and depositors' monies -a bank has to maintain certain ratios related to how much it lends compared to its capital assets -a bank has to have a minimum amount of capital holdings to do business Financial institutions are safe places to keep your money because... They are regulated by federal guidelines and are in business to make money for its depositors, members and/or stock holders.