Insurance Chapter 1: Financial Services Sector

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What is one of the services banks have offered for centuries?

Offering Mutual Funds

Financial Advising

Selling Insurance Policies

Discounting Commercial Notes and Making Business Loans (correct)

What is one of the trends affecting financial-service firms?

Decreasing Competition

Stable Interest Rates

Rising Competition (correct)

Government Regulation

What is one of the services banks began offering in the past century?

Carrying Out Currency Exchanges

Granting Consumer Loans (correct)

Offering Checking Accounts

Supporting Government Activities with Credit

What is one of the reasons for change in banking and financial services?

Crisis, Reform, and Change Signup and view all the answers

What is one of the financial products offered by banks and their competitors?

Mutual Funds, Annuities, and Other Investment Products Signup and view all the answers

What is one of the technological changes affecting financial-service firms?

Automation Signup and view all the answers

What was the main purpose of the Financial Services Modernization Act?

To allow banks to expand their role to be full-service providers Signup and view all the answers

What type of financial institution specializes in helping people get residential mortgages?

Savings and loan association Signup and view all the answers

What is the result of the convergence of financial service providers?

Increased competition and innovation Signup and view all the answers

What are the closest competitors to banks in the financial sector?

Savings associations, credit unions, and fringe banks Signup and view all the answers

What is the main benefit of the Financial Services Modernization Act for banks?

Increased market share and ability to enter new industries Signup and view all the answers

What is the result of the Financial Services Modernization Act for the public?

One-stop shopping for financial services Signup and view all the answers

What is the primary benefit of combining insurance products with banking services?

To leverage the trust that people generally have in banks to sell insurance products Signup and view all the answers

What is the result of the increasing size of financial institutions?

Fewer small, independently owned financial institutions Signup and view all the answers

What is an example of a bank-insurer affiliation?

The merger of Citicorp and Traveler’s Insurance to Citigroup Signup and view all the answers

What is convergence in the financial sector?

The bringing together of firms from different industries to create conglomerate firms Signup and view all the answers

Why did the anticipated synergy effects of the Citigroup merger not materialize?

Not provided in the passage Signup and view all the answers

What is the relationship between consolidation and convergence in the financial sector?

They are related trends with consolidation leading to convergence Signup and view all the answers

Insurance Chapter 1: Financial Services Sector

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