Understanding Financial Assets: Types and Characteristics
30 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which of the following is NOT a characteristic of financial assets?

  • Cannot be depreciated
  • Provide a continuing stream of services to their owners (correct)
  • Serve as a store of value (purchasing power)
  • Promise future returns to their owners

    • Which type of financial asset represents ownership shares in a business firm?

  • Derivatives
  • Money
  • Equities (stocks) (correct)
  • Debt securities

    • Which of the following is a characteristic of non-negotiable debt securities?

  • Entitle holders to a priority claim over equities
  • Easily transferred from holder to holder
  • Cannot legally be transferred to another party (correct)
  • Closely linked to other financial assets

    • Which of the following is the NEWEST kind of financial instrument?

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

    Which of the following financial assets entitles its holders to a priority claim over the holders of equities?

    <p>Debt securities</p> Signup and view all the answers

    Which of the following is a characteristic of financial assets?

    <p>They are not fungible</p> Signup and view all the answers

    What is the primary reason people accept money?

    <p>Because they know they can exchange it for goods and services later</p> Signup and view all the answers

    What determines the most advantageous supplier of financial services in smaller cities and rural communities?

    <p>The local bank</p> Signup and view all the answers

    Which of the following is NOT a characteristic of a perfect liquid asset?

    <p>Backed by a commodity</p> Signup and view all the answers

    What will be a key factor for the future success of financial-service firms?

    <p>Cost control and productivity</p> Signup and view all the answers

    Which of the following financial institutions will have a competitive advantage according to the text?

    <p>Institutions with established computer, telephone, and full-service office networks</p> Signup and view all the answers

    What is the role of the rule of interest in a financial system?

    <p>To measure the penalty for not converting money into income-earning assets</p> Signup and view all the answers

    What is mentioned as one of the newer financial instruments or services with good prospects for rapid development?

    <p>Loans to remodel residential dwellings</p> Signup and view all the answers

    What happens to the purchasing power of money during inflation?

    <p>It decreases</p> Signup and view all the answers

    According to the passage, what is one of the reasons for the potential growth of small business loans?

    <p>Emergence of numerous new firms to replace failing ones</p> Signup and view all the answers

    Which statement is true about financial systems?

    <p>They are constantly evolving</p> Signup and view all the answers

    What is deflation?

    <p>A situation where the average level of prices for goods and services declines</p> Signup and view all the answers

    What is NOT mentioned as one of the newer financial instruments or services with good prospects for rapid development?

    <p>Loans for purchasing new homes</p> Signup and view all the answers

    What is one way smaller financial-service companies can compete effectively against financial-service giants?

    <p>By providing more personalized financial services</p> Signup and view all the answers

    In the context of the text, what does the Single Regulator Model imply?

    <p>One regulatory agency supervises the operations of the whole financial service firm</p> Signup and view all the answers

    How might the future marketplace depend on the world's payments system?

    <p>By ensuring prompt payments for goods and services sold</p> Signup and view all the answers

    What role does outsourcing play in the competitiveness of smaller financial companies?

    <p>Enhances their ability to provide personalized services</p> Signup and view all the answers

    How does the Subsidiary Organizational Form differ from the Financial Holding Company Organizational Form?

    <p>Each subsidiary company is independent of the parent firm's earnings</p> Signup and view all the answers

    Why is the ability of the world's payments system to function efficiently crucial for tomorrow's marketplace?

    <p>To ensure businesses can be confident about prompt payments for goods and services</p> Signup and view all the answers

    What type of information will financial institutions be expected to disclose more completely in the future?

    <p>Deposit terms and withdrawal penalties</p> Signup and view all the answers

    What is the principal cause of the proliferation of privacy legislation mentioned in the text?

    <p>Identity theft</p> Signup and view all the answers

    Which act requires increased public disclosure of deposit terms and withdrawal penalties?

    <p>Truth in Savings Act (1991)</p> Signup and view all the answers

    What do consumers frequently lose access to due to identity theft according to the text?

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

    What aspect of the financial-service industry will face increasing regulatory scrutiny according to the text?

    <p>Fairness in resource utilization and service distribution</p> Signup and view all the answers

    What will financial institutions be expected to promote through increased disclosure according to the text?

    <p>Better financial decision making</p> Signup and view all the answers

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser