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fin 433 exam 1 Questions with 100% Correct Answers
UPDATED!!!
money market securities - ANSWER facilitate the sale of short
term debt securities by deficit units to surplus units. det
securities that have a maturity of one year or less. given out by
high quality issuers typically
capital market securites - ANSWER facilitate the sale of long
term securities by deficit units to surplus units
bonds, mortgages, mortgage-backed securities, stocks
-secondary market for capital market securities
derivative securities - ANSWER financial contracts whose values
are derived from the values of underlying assets
behavioral finance - ANSWER the application of psychology to
make financial decisions
securities act of 1993 - ANSWER goal was to complete
disclosure of relevant financial info on publicly offered
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securities and to prevent fraudulent practices in selling those
securities.
securities act of 1994 - ANSWER extended the disclosure
requirements to secondary market issues
Sarbanes-Oxley Act - ANSWER required that firms provide more
complete and accurate financial info
Financial Institution - ANSWER are companies engaged in the
business of dealing with financial and monetary transactions.
FIs resolve limitations caused by market imperfections
roles of depository institutions - ANSWER DIs accept deposits
and provide credit through loans and purchases of securities.
•Offer liquid deposit accounts to surplus units
•Provide loans of the size and maturity desired by deficit units
•Accept the risk on loans provided
•Have more expertise in evaluating creditworthiness
•Diversify their loans among numerous deficit units
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commercial banks - ANSWER •The most dominant type of
depository institution
Focus is on commercial loans, multifamily residential loans and
commercial real estate loans
saving institutions - ANSWER •Also called thrift institutions and
include Savings and Loans (S&Ls) and Savings Banks
•Concentrate on residential mortgage loans
credit unions - ANSWER •Nonprofit organizations
Restrict business to CU members with a common bond
finance companies - ANSWER obtain funds by issuing securities
and lend the funds to individuals and small businesses
mutual funds - ANSWER •sell shares to surplus units and use
the funds received to purchase a portfolio of securities.
securities firms - ANSWER •provide a wide variety of functions
in financial markets. (Broker, Underwriter, Dealer, Advisory)
fin 433 exam 1 Questions with 100% Correct Answers
UPDATED!!!
money market securities - ANSWER facilitate the sale of short
term debt securities by deficit units to surplus units. det
securities that have a maturity of one year or less. given out by
high quality issuers typically
capital market securites - ANSWER facilitate the sale of long
term securities by deficit units to surplus units
bonds, mortgages, mortgage-backed securities, stocks
-secondary market for capital market securities
derivative securities - ANSWER financial contracts whose values
are derived from the values of underlying assets
behavioral finance - ANSWER the application of psychology to
make financial decisions
securities act of 1993 - ANSWER goal was to complete
disclosure of relevant financial info on publicly offered
,2|Page
securities and to prevent fraudulent practices in selling those
securities.
securities act of 1994 - ANSWER extended the disclosure
requirements to secondary market issues
Sarbanes-Oxley Act - ANSWER required that firms provide more
complete and accurate financial info
Financial Institution - ANSWER are companies engaged in the
business of dealing with financial and monetary transactions.
FIs resolve limitations caused by market imperfections
roles of depository institutions - ANSWER DIs accept deposits
and provide credit through loans and purchases of securities.
•Offer liquid deposit accounts to surplus units
•Provide loans of the size and maturity desired by deficit units
•Accept the risk on loans provided
•Have more expertise in evaluating creditworthiness
•Diversify their loans among numerous deficit units
, 3|Page
commercial banks - ANSWER •The most dominant type of
depository institution
Focus is on commercial loans, multifamily residential loans and
commercial real estate loans
saving institutions - ANSWER •Also called thrift institutions and
include Savings and Loans (S&Ls) and Savings Banks
•Concentrate on residential mortgage loans
credit unions - ANSWER •Nonprofit organizations
Restrict business to CU members with a common bond
finance companies - ANSWER obtain funds by issuing securities
and lend the funds to individuals and small businesses
mutual funds - ANSWER •sell shares to surplus units and use
the funds received to purchase a portfolio of securities.
securities firms - ANSWER •provide a wide variety of functions
in financial markets. (Broker, Underwriter, Dealer, Advisory)
