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Questions and Answers
What is the primary function of Ford Motor Credit Company mentioned in the text?
What is the primary function of Ford Motor Credit Company mentioned in the text?
- Advising companies on securities to issue
- Lending funds to small businesses
- Acquiring funds from individual investors
- Lending to consumers for purchasing Ford cars (correct)
Which type of financial intermediary borrows funds from lenders and then lends the funds to borrowers?
Which type of financial intermediary borrows funds from lenders and then lends the funds to borrowers?
- Investment banks (correct)
- Bond Funds
- Equity Funds
- Money Market Funds
Direct finance involves funds flowing directly from _____________ to borrowers in the financial markets.
Direct finance involves funds flowing directly from _____________ to borrowers in the financial markets.
- Governments
- Insurance companies
- Financial intermediaries
- Lenders (correct)
What is the key reason for the need of financial intermediaries as mentioned in the text?
What is the key reason for the need of financial intermediaries as mentioned in the text?
Which concept refers to the problem of hidden information that can lead to adverse outcomes in transactions?
Which concept refers to the problem of hidden information that can lead to adverse outcomes in transactions?
What type of funds acquire funds from individual investors and purchase diversified portfolios of stocks and bonds?
What type of funds acquire funds from individual investors and purchase diversified portfolios of stocks and bonds?
In indirect finance, a financial intermediary borrows funds from lenders to ____________.
In indirect finance, a financial intermediary borrows funds from lenders to ____________.
'Economies of scope' mentioned in the text refer to the benefit of ____________.
'Economies of scope' mentioned in the text refer to the benefit of ____________.
What is the primary source of fee income for banks mentioned in the text?
What is the primary source of fee income for banks mentioned in the text?
Which of the following is NOT listed as a trading activity or risk management technique for banks?
Which of the following is NOT listed as a trading activity or risk management technique for banks?
What does the formula $\frac{\text{net income}}{\text{assets}}$ represent?
What does the formula $\frac{\text{net income}}{\text{assets}}$ represent?
Which of the following is NOT one of the objectives mentioned in the text?
Which of the following is NOT one of the objectives mentioned in the text?
Which of the following formulas represents the Net Interest Margin (NIM)?
Which of the following formulas represents the Net Interest Margin (NIM)?
Which of the following activities is NOT considered an off-balance sheet activity for banks?
Which of the following activities is NOT considered an off-balance sheet activity for banks?
Which of the following references is focused on the role of banks in the market for liquidity?
Which of the following references is focused on the role of banks in the market for liquidity?
What does the formula $\frac{\text{net income}}{\text{capital}}$ represent?
What does the formula $\frac{\text{net income}}{\text{capital}}$ represent?
Which of the following references is focused on the microeconomics of banking?
Which of the following references is focused on the microeconomics of banking?
Which of the following activities is NOT listed as a source of fee income for banks?
Which of the following activities is NOT listed as a source of fee income for banks?
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