Financial Assets and Banking Instruments Quiz
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Questions and Answers

What is the monthly, quarterly, semiannual, or annual price paid for an insurance policy?

  • Bond
  • Certificate of deposit
  • Pension
  • Premium (correct)
  • What are the five basic investment considerations?

  • Variability, complexity, the investment-interest relationship, savings objectives, timeliness
  • Consistency, simplicity, the investment-interest relationship, savings objectives, diversification
  • Variability, complexity, the risk-return relationship, investment objectives, timeliness
  • Consistency, simplicity, the risk-return relationship, investment objectives, diversification (correct)
  • What do risky investments usually offer in terms of opportunities for returns?

  • Lower, low
  • Greater, low
  • Lower, high
  • Greater, high (correct)
  • What is a characteristic of credit unions based on the text provided?

    <p>They generally make riskier loans</p> Signup and view all the answers

    What type of relationship does a bond represent?

    <p>Investment-interest</p> Signup and view all the answers

    What is a common characteristic of a financial asset?

    <p>Bonds</p> Signup and view all the answers

    What distinguishes a certificate of deposit from a savings account?

    <p>With a savings account, the bank issues a type of receipt showing you have loaned money to the bank.</p> Signup and view all the answers

    Which of the following is necessary for the existence of financial intermediaries?

    <p>Savers</p> Signup and view all the answers

    Why are banks considered financial intermediaries?

    <p>It channels savings to investors.</p> Signup and view all the answers

    What is the primary factor on which capital formation depends?

    <p>Saving and borrowing</p> Signup and view all the answers

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