Question 1

Which of the following are NOT examples of institutional investors?&#10;A)Mutual funds and pension funds&#10;B)Insurance companies&#10;C)Commercial banks&#10;D)All of the above are institutional investors

Accepted Answer

All the options listed (mutual funds and pension funds, insurance companies, commercial banks) are examples of institutional investors, which are entities that pool money to purchase securities, real property, and other investment assets or originate loans.

Question 2

Pension funds represent a declining segment of the institutional market.

Accepted Answer

False

Question 3

Organizations responsible for bringing together large pools of capital for purposes of reinvestment are called:&#10;A)individual investors.&#10;B)institutional investors.&#10;C)social security clubs.&#10;D)B and C

Accepted Answer

Institutional investors are organizations that pool large amounts of capital from multiple sources, such as pension funds, insurance companies, and endowments, and reinvest those funds in various financial products and companies. Individual investors refer to private individuals who invest their own money. Social security clubs are not a recognized term in finance or investing.

Question 4

___________ represent permanent capital funds that are donated to universities,churches,or civic organizations.&#10;A)Trusts&#10;B)Endowments&#10;C)Commingled funds&#10;D)Annuities

Accepted Answer

Endowments represent permanent capital funds that are donated to universities, churches, or civic organizations. Trusts and annuities are similar structures used for financial planning and asset distribution. Commingled funds are pools of investment capital from multiple investors that are managed collectively.

Question 5

The largest category of institutional investors is:&#10;A)foundations.&#10;B)personal trusts.&#10;C)mutual savings banks.&#10;D)pension funds.

Accepted Answer

The largest category of institutional investors is pension funds. Pension funds invest the pooled contributions of employees and employers to provide retirement benefits to employees. They are typically the largest institutional investors in many countries and play a significant role in financial markets. Foundations, personal trusts, and mutual savings banks are also types of institutional investors but are not as large as pension funds in terms of assets under management.

Question 6

Foundations represent profitable organizations set up to accomplish social,educational,or charitable purposes.

Accepted Answer

Foundations represent non-profit organizations set up to accomplish social, educational, or charitable purposes.

Deck 22: the Makeup of Institutional Investors