F100 TEST 2 with verified detailed solutions ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
who are suppliers of capital - correct answer✔✔individuals and institutions with "excess
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
funds." These groups are saving money and looking for a rate of return on their investment.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
How is capital transferred between savers and borrowers? - correct answer✔✔Direct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
transfers, investment banking house, financial intermediaries ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Direct transfer from saver to borrower - correct answer✔✔Savers transfer funds to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
borrowers, borrowers transfer claims to savers ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Commercial banks, Savings&Loans - correct answer✔✔generally lend money to individuals ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
and businesses(assets, find deposits to fund these loans(liabilities)
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Credit unions - correct answer✔✔looks at the financial transactions of people in a specific
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
organization or group and provide financial services similar to banks ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Universal bank - correct answer✔✔Does both commercial and investment banking
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Insurance companies - correct answer✔✔sell insurance policies and invest premium proceeds
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Pension Funds - correct answer✔✔retirement plans that are funded by corporations or
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
government agencies and invest primarily in bonds, stocks, mortgages, and real estate ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Mutual funds - correct answer✔✔organizations that pool investor funds to invest in a
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
diversified portfolio such as stocks, long term bonds, or short term debt instruments. They
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
target small investors and are regulated
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
, Hedge funds - correct answer✔✔similar to mutual finds but are for institutions or wealthy
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
individuals and are unregulated ||\\//|| ||\\//|| ||\\//||
Private equity firms - correct answer✔✔Invest in mature but struggling companies and
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
restructure them and turn them around. They exit the company by selling them or taking ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
them public through IPOs ||\\//|| ||\\//|| ||\\//||
Venture Capital Firms - correct answer✔✔similar to private equity, differ in the types and
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
sizes of companies they invest. The mostly invest in young and start up companies that have
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
high growth potential
||\\//|| ||\\//||
Brokerage firm - correct answer✔✔trade securities for its own account or on behalf of their
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
customers
Top 4 universal banks - correct answer✔✔Citi, JP Morgan, Wells Fargo, BoA
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Market share of giant banks - correct answer✔✔60% ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Money Markets - correct answer✔✔Short term debt obligations with less than a year to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
maturity
Capital Markets - correct answer✔✔Long term financial securities
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Money Market instruments - correct answer✔✔Overnight reserves, commercial paper, Short
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
term gov securities, short term CDs, short term savings account, repos, banker acceptance,
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
money market funds ||\\//|| ||\\//||
who are suppliers of capital - correct answer✔✔individuals and institutions with "excess
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
funds." These groups are saving money and looking for a rate of return on their investment.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
How is capital transferred between savers and borrowers? - correct answer✔✔Direct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
transfers, investment banking house, financial intermediaries ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Direct transfer from saver to borrower - correct answer✔✔Savers transfer funds to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
borrowers, borrowers transfer claims to savers ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Commercial banks, Savings&Loans - correct answer✔✔generally lend money to individuals ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
and businesses(assets, find deposits to fund these loans(liabilities)
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Credit unions - correct answer✔✔looks at the financial transactions of people in a specific
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
organization or group and provide financial services similar to banks ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Universal bank - correct answer✔✔Does both commercial and investment banking
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Insurance companies - correct answer✔✔sell insurance policies and invest premium proceeds
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Pension Funds - correct answer✔✔retirement plans that are funded by corporations or
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
government agencies and invest primarily in bonds, stocks, mortgages, and real estate ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Mutual funds - correct answer✔✔organizations that pool investor funds to invest in a
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
diversified portfolio such as stocks, long term bonds, or short term debt instruments. They
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
target small investors and are regulated
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
, Hedge funds - correct answer✔✔similar to mutual finds but are for institutions or wealthy
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
individuals and are unregulated ||\\//|| ||\\//|| ||\\//||
Private equity firms - correct answer✔✔Invest in mature but struggling companies and
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
restructure them and turn them around. They exit the company by selling them or taking ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
them public through IPOs ||\\//|| ||\\//|| ||\\//||
Venture Capital Firms - correct answer✔✔similar to private equity, differ in the types and
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
sizes of companies they invest. The mostly invest in young and start up companies that have
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
high growth potential
||\\//|| ||\\//||
Brokerage firm - correct answer✔✔trade securities for its own account or on behalf of their
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
customers
Top 4 universal banks - correct answer✔✔Citi, JP Morgan, Wells Fargo, BoA
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Market share of giant banks - correct answer✔✔60% ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Money Markets - correct answer✔✔Short term debt obligations with less than a year to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
maturity
Capital Markets - correct answer✔✔Long term financial securities
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Money Market instruments - correct answer✔✔Overnight reserves, commercial paper, Short
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
term gov securities, short term CDs, short term savings account, repos, banker acceptance,
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
money market funds ||\\//|| ||\\//||
