Page 163 - CAPE Financial Services Syllabus Macmillan_Neat

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1. Which of the following is NOT considered as a financial institution?

(A) Credit union
(B) Insurance company
(C) Investment company
(D) Financial service commission

2. Financial institutions offer all of the following except

(A) ponzi schemes
(B) mortgage
(C) savings
(D) loans

3. Which of the following statements about banks is INCORRECT?

(A) Banks play a critical role in the economy.
(B) They indirectly issue money in the form of deposits
(C) They provide a low-risk environment for investment and other forms of business
(D) Banks make loans, and are therefore very different from other financial institutions

4. Which of the following persons will review a commercial bank's books to determine
whether loans with delinquent payments impair a bank's capital?

(A) bank examiner
(B) loan officer
(C) bank teller
(D) broker

5. A securities dealer or trader, earns a profit by

(A) charging a commission
(B) buying at the bid price and sell at the bid price
(C) buying at the bid price and selling at the offer price*
(D) buying at the offer price and selling at the bid price

6. Which of the following types of financial institutions is MOST likely to be a market
maker in mortgage-backed securities?

(A) A savings and loan association
(B) A commercial bank
(C) An investment bank
(D) A credit union

7. An insurance company’s economist would

(A) forecast interest rates
(B) talk only to their direct superiors, but not to the institution's corporate customers
(C) not be concerned about the costs and benefits of some internal investment project
(D) have little use for statistical analysis.

02269010/SPEC2016

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