Duplicate of Topic 7: Commercial, investment banking & non bank financial institutions

Question 1

What is the main objective of a commercial bank?

Accepted Answer

Profit maximisation for the shareholders

Question 2

What do banks do with the money they receive?

Accepted Answer

Issue loans and purchase investments

Question 3

When a company issues shares for the first time, what are the two main offering types?

Accepted Answer

Underwritten & sold on a best-efforts basis

Question 4

What is the most important source of funds for large commercial banks?

Accepted Answer

Borrowed funds

Question 5

Which non bank financial institution specialises in making mortgage loans?

Accepted Answer

Building society

Question 6

What are the main non bank financial institutions in Australia?

Accepted Answer

All of the above

Question 7

Is liquidity management important for commercial banks?

Accepted Answer

Yes

Question 8

What is the policy called that stops the biggest four banks in Australia in merging?

Accepted Answer

Four Pillar

Question 9

What is a major source of income for commercial banks?

Accepted Answer

Interest

Question 10

Which type of bank brings new securities to the market?

Accepted Answer

Investment

Question 11

What is the primary source of funds for small commercial banks?

Accepted Answer

Deposits

Question 12

Deposits accounts take the form in what three ways?

Accepted Answer

Transaction, savings, term

Question 13

What is Assets equal to?

Accepted Answer

Liabilities + Capital, Liabilities + Equity

Questions 13