LOMA 281 UPDATED COMPLETE
QUESTIONS AND ANSWERS PROFESSIONAL
REVIEW SHEET
●● Financial Institutions
Answer: A business that owns primarily financial assets, such as stock
and bonds, rather than fixed assets, such as equipment and raw materials
●● Taking out a car loan, you would go to a bank, insurance company,
or securities firm?
Answer: Bank
●● Protecting the value of their home from fire is an example of going
to a bank, insurance company, or securities firm?
Answer: Insurance company
●● Saving for college would be an example of going to the bank,
insurance company, or securities firm?
Answer: Bank, Insurance company, and securities firm
●● Investing money you have inherited would be an example of going
to the bank, insurance company, or securities firm?
Answer: Securities firm, bank, and insurance company
,●● Depository Institution
Answer: A financial institution that specializes in accepting deposits and
making loans
ex. commercial banks, savings and loan associations, and credit unions
●● Securities Firm
Answer: A financial institution that issues securities and engages
primarily in investing and trading securities
●● A Security
Answer: A certificate that represents either an ownership interest in a
business (for example, a share of stock) or a debt owed by a business,
government, or agency (for example, a bond)
●● Mutual Fund Companies
Answer: A financial Institution that pools money from many, often
thousands, of investors to build diversified portfolios of investment
securities
●● Mutual Fund
, Answer: An investment portfolio with a distinct investment objective
and risk profile. Investors purchase mutual fund shares that represent a
proportional ownership interest in the underlying assets of the portfolio
●● Finance Companies
Answer: A financial institution that specializes in making short and
medium term loans to businesses and people
●● Insurance Company
Answer: A company that accepts risk and makes a promise to pay a
policy benefit if the covered loss does occur
●● Convergence
Answer: The movement toward a single financial institution being able
to serve a customers banking, insurance, and securities needs. This
happened in the 1990s which resulted in a consolidation in the financial
services industry
●● Consolidation
Answer: The combining of financial services institutions primarily
through mergers and acquisitions. This results in fewer traditional
financial services institutions. Occurs primarily through mergers and
acquisitions
●● Merger
QUESTIONS AND ANSWERS PROFESSIONAL
REVIEW SHEET
●● Financial Institutions
Answer: A business that owns primarily financial assets, such as stock
and bonds, rather than fixed assets, such as equipment and raw materials
●● Taking out a car loan, you would go to a bank, insurance company,
or securities firm?
Answer: Bank
●● Protecting the value of their home from fire is an example of going
to a bank, insurance company, or securities firm?
Answer: Insurance company
●● Saving for college would be an example of going to the bank,
insurance company, or securities firm?
Answer: Bank, Insurance company, and securities firm
●● Investing money you have inherited would be an example of going
to the bank, insurance company, or securities firm?
Answer: Securities firm, bank, and insurance company
,●● Depository Institution
Answer: A financial institution that specializes in accepting deposits and
making loans
ex. commercial banks, savings and loan associations, and credit unions
●● Securities Firm
Answer: A financial institution that issues securities and engages
primarily in investing and trading securities
●● A Security
Answer: A certificate that represents either an ownership interest in a
business (for example, a share of stock) or a debt owed by a business,
government, or agency (for example, a bond)
●● Mutual Fund Companies
Answer: A financial Institution that pools money from many, often
thousands, of investors to build diversified portfolios of investment
securities
●● Mutual Fund
, Answer: An investment portfolio with a distinct investment objective
and risk profile. Investors purchase mutual fund shares that represent a
proportional ownership interest in the underlying assets of the portfolio
●● Finance Companies
Answer: A financial institution that specializes in making short and
medium term loans to businesses and people
●● Insurance Company
Answer: A company that accepts risk and makes a promise to pay a
policy benefit if the covered loss does occur
●● Convergence
Answer: The movement toward a single financial institution being able
to serve a customers banking, insurance, and securities needs. This
happened in the 1990s which resulted in a consolidation in the financial
services industry
●● Consolidation
Answer: The combining of financial services institutions primarily
through mergers and acquisitions. This results in fewer traditional
financial services institutions. Occurs primarily through mergers and
acquisitions
●● Merger
