Deck 15: Securities, Investment Insurance Products

Question 1

Consolidation refers to the concentration of assets due to mergers and acquisitions.

Answer 1

True

Question 2

Convergence refers the various types of financial services that are available today because of changes in technology.

Answer 2

False

Question 3

One of the benefits of intermediation is lower taxes.

Answer 3

False

Question 4

Secondary securities include demand deposits and mutual fund shares.

Question 5

The principal assets of financial intermediaries are primary securities.

Question 6

Insurance transfers risk between financial intermediaries.

Question 7

The McCarren-Ferguson Act concerns the regulation of derivatives.

Question 8

Decreasing term insurance provides for decreasing protection, but increased savings.

Question 9

Credit life insurance is used to ensure the payment of loans in the event the borrower dies.

Question 10

Cash surrender value is the current price of money market funds.

Question 11

CMOs are similar to ABS.

Question 12

Mutual funds are a good source of fee income for the financial institutions that invest in them.

Question 13

Hybrid funds invest primarily in derivatives.

Question 14

Mutual funds face market risk, but little or no operational risk.

Question 15

Convergence refers to:

A) mergers
B) assets
C) equity
D) none of the above

Question 16

Consolidation refers to:

A) debt
B) assets
C) lines of business
D) none of the above

Question 17

Insurance companies are allowed to own shares of U.S.

A) banks
B) mutual funds
C) REITs
D) all of the above

Question 18

Whole life is the same as:

A) term
B) annuity
C) straight life
D) credit life

Question 19

Life insurance companies are regulated by

A) OCC
B) FDIC
C) Federal Reserve
D) States

Question 20

One of the principal goals of the NAIC

A) consumer protection
B) standardize reserve requirements
C) fair and orderly markets
D) none of the above

Question 21

Annuities provide for

A) product liability
B) savings
C) credit defaults
D) hybrid funds

Question 22

S. life insurance companies are

A) term
B) whole life
C) legal reserve
D) mutually owned

Question 23

Citigroup could be classified as

A) BIS
B) ETF
C) LCFO
D) REIT

Question 24

Operational risk refers to

A) fraud
B) failed internal processes
C) systems failures
D) all of the above