30 Questions
Which of the following is NOT a characteristic of financial assets?
Provide a continuing stream of services to their owners
Which type of financial asset represents ownership shares in a business firm?
Equities (stocks)
Which of the following is a characteristic of non-negotiable debt securities?
Cannot legally be transferred to another party
Which of the following is the NEWEST kind of financial instrument?
Derivatives
Which of the following financial assets entitles its holders to a priority claim over the holders of equities?
Debt securities
Which of the following is a characteristic of financial assets?
They are not fungible
What is the primary reason people accept money?
Because they know they can exchange it for goods and services later
What determines the most advantageous supplier of financial services in smaller cities and rural communities?
The local bank
Which of the following is NOT a characteristic of a perfect liquid asset?
Backed by a commodity
What will be a key factor for the future success of financial-service firms?
Cost control and productivity
Which of the following financial institutions will have a competitive advantage according to the text?
Institutions with established computer, telephone, and full-service office networks
What is the role of the rule of interest in a financial system?
To measure the penalty for not converting money into income-earning assets
What is mentioned as one of the newer financial instruments or services with good prospects for rapid development?
Loans to remodel residential dwellings
What happens to the purchasing power of money during inflation?
It decreases
According to the passage, what is one of the reasons for the potential growth of small business loans?
Emergence of numerous new firms to replace failing ones
Which statement is true about financial systems?
They are constantly evolving
What is deflation?
A situation where the average level of prices for goods and services declines
What is NOT mentioned as one of the newer financial instruments or services with good prospects for rapid development?
Loans for purchasing new homes
What is one way smaller financial-service companies can compete effectively against financial-service giants?
By providing more personalized financial services
In the context of the text, what does the Single Regulator Model imply?
One regulatory agency supervises the operations of the whole financial service firm
How might the future marketplace depend on the world's payments system?
By ensuring prompt payments for goods and services sold
What role does outsourcing play in the competitiveness of smaller financial companies?
Enhances their ability to provide personalized services
How does the Subsidiary Organizational Form differ from the Financial Holding Company Organizational Form?
Each subsidiary company is independent of the parent firm's earnings
Why is the ability of the world's payments system to function efficiently crucial for tomorrow's marketplace?
To ensure businesses can be confident about prompt payments for goods and services
What type of information will financial institutions be expected to disclose more completely in the future?
Deposit terms and withdrawal penalties
What is the principal cause of the proliferation of privacy legislation mentioned in the text?
Identity theft
Which act requires increased public disclosure of deposit terms and withdrawal penalties?
Truth in Savings Act (1991)
What do consumers frequently lose access to due to identity theft according to the text?
Credit
What aspect of the financial-service industry will face increasing regulatory scrutiny according to the text?
Fairness in resource utilization and service distribution
What will financial institutions be expected to promote through increased disclosure according to the text?
Better financial decision making
Learn about financial assets that promise future returns and serve as a store of value without providing a continuing stream of services to their owners. Explore the characteristics of money and equities (stocks) as types of financial assets.
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