Lengthening liability durations e.g. issue longer term CD's, obtain more core transactions accounts from stable sources
Shortening liability durations e.g issue longer term CD's, obtain more core transactions accounts from stable sources
14. A debt instrument sold by a bank to its depositors that pays annual interest of a given amount and at maturity pays back the original purchase is called
a certificate of deposit
commercial paper
a municipal bond
federal funds
15. Which of the following is a contractual savings institution?
a life insurance company
a mutual fund
a credit union
a savings and loan association
16. The primary purpose of deposit insurance is
prevent banking panics
improve the flow of information to investors
protect bank shareholders against losses
protect bank employees from unemployment
17. A Financial crisis is
not possible in the modern financial environment
a major disruption in the financial markets
typically followed by an economic boom
a feature of developing economies only
18. Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called
fund-available markets
commodity markets
financial markets
derivative exchange markets
19. When an investment bank---securities, it guarantees a price for a corporation's securities and then sells them to the public
overtakes
undertakes
underwrites
overwrites
20. Which of the following can be described as involving direct finance?
people buy shares of common stock in the primary markets
people buy shares in a mutual fund
a corporation takes out loans from a bank
a corporate buys a short-term corporate security in a secondary market