FIN350: Ch 1-4 Review

_______ is a term used to refer to a mortgage loan that exceeds the value of the house financed by the mortgage.

Loans made between banks for very short terms (usu. up to 1 week maturity) are called _____ .

Which following type of depository institution is typically structured as a non-profit, membership association?

The central banking system in the U.S. was established by the Federal Reserve Act of _____.

Insurance companies and pension funds are the two most important examples of _______.

Which of the following is not one of the three areas of finance?

Investment banking firms sell or market existing securities to individual and institutional investors.

Common stock represents debt equity in a corporation.

_____ is a key factor in determining efficient financial markets.

Which of the following is not considered another term for money?

Bank liquidity reflects the ability to keep the value of a bank’s assets greater than its liabilities.

 ____ is a rise or increase in the prices of goods and services, that is not offset by increases in their quality.

_____ involves the direct or indirect transfer of individual savings to business firms in exchange for their securities.

Money market securities are debt instruments or securities with maturities of one year or less.

_____ refers to the organizations or intermediaries that help the financial system operate efficiently.

1.    A/An ______ engages in both commercial banking and investment banking activities.

________ was/were a major factor in the 2007-2009 financial crisis in the U.S.

1.    Individuals, businesses and governments (fed, state and local) are considered _______.

_______ typically account(s) for the majority of a bank’s assets.

1.    The following is not one of the three basic ways to clear a check through the U.S. banking system:

Real assets include money, debt securities and financial contracts backed by real assets + earning power of the issuer

Liquidity risk refers to likelihood that a bank will be unable to meet depositor withdrawal demands & other liabilities.

Paper money proclaimed to be legal tender by the government for making payments is called _______.

Businesses and govt's issue long-term debt securities, called preferred stock to finance their assets and operations.

The transfer of existing stocks and bonds takes place in the secondary market.