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Activity BF

1. The document provides instructions to copy questions from a test on financial institutions and provide written answers on the provided lines. 2. It includes 10 multiple choice questions about different types of financial institutions such as life insurance companies, pension funds, mutual funds, and their functions. 3. It also includes 10 true/false statements about financial concepts like share price, financial markets, money markets, and primary/secondary markets.

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Jan Maurile Agua
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78 views2 pages

Activity BF

1. The document provides instructions to copy questions from a test on financial institutions and provide written answers on the provided lines. 2. It includes 10 multiple choice questions about different types of financial institutions such as life insurance companies, pension funds, mutual funds, and their functions. 3. It also includes 10 true/false statements about financial concepts like share price, financial markets, money markets, and primary/secondary markets.

Uploaded by

Jan Maurile Agua
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Direction: Read each question carefully, copy the question on your paper and write

your answer on the space before each number.

_____1. It is a financial intermediary handling individual savings. It receives premium


payments placed in loans or investments to accumulate funds to cover future
benefits.
A. life insurance company C. savings bank
B. commercial bank D. credit union
_____2. Which of the following is not a financial institution?
A. A pension fund C. A commercial bank
B. A newspaper publisher D. An insurance company
_____3. It is a set up so that employees of corporations or governments can receive
income after retirement.
A. life insurance company C. Savings bank
B. Pension fund D. credit union
_____4. It is a type of financial intermediary that pools savings of individuals and
makes them available to business and government users. Funds obtained through
the sale of shares.
A. Mutual Funds C. Savings and loans
B. Commercial banks D. Credit Union
_____5. Most businesses raise money by selling their securities in a.
A. direct placement C. public offering
B. stock exchange D. private placement
_____ 6. Which of the following is not a service provided by financial institutions.
A. Buying the businesses of customers
B. Investing customers’ savings in stocks and bonds
C. Paying savers’ interest on deposit
D. Lending money to customers
_____7. By definition, the money market involves the buying and selling of. A.
funds that mature in more than one year.
B. flows of funds.
C. stocks and bonds.
D. short-term funds.
_____8. It creates financial relationship between suppliers and users of short-term
funds.
A. financial market C. stock market
B. money market D. capital market
_____9. Firms that require funds from external sources can obtain them from A.
financial markets. C. financial institutions.
B. private placement. D. All the above.
_____10. The science and art of managing money.
A. Financial Management C. Management
Finance D. Personal Finance
Directions: Write T if the statement is True and F if the statement is False.
Write your answer on the space provided
______1. High cash flow is generally associated with a higher share price whereas
higher risk tends to result in a lower share price.
______2. The wealth of corporate owners has measured by the share price of the stock.
______3. When considering each financial decision alternative or possible action in
terms of its impact on the share price of the firm's stock, financial managers
should accept only those actions that expected to maximize shareholder
value.
______4. Stockholders expect to earn higher rates of return on investments of lower
risk and lower rates of return on investments of higher risk.
______5. Financial markets are intermediaries that channel the savings of individuals,
businesses, and government into loans or investments.
______6. Commercial banks obtain most of their funds from borrowing in the capital
markets.
______7. The money market involves trading of securities with maturities of one year
or less while the capital market involves the buying and selling of securities
with maturities for more than one year.
______8. Primary and secondary markets are markets for short-term and long-term
securities, respectively.
______9. A mutual fund is a type of financial intermediary that obtains funds through
the sale of shares and uses the proceeds to acquire bonds and stocks issued
by various business and governmental units.
______10. Credit unions are the largest type of financial intermediary handling
individual savings.

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