Deck 15: Nonbank Thrift Institutions: Savings and Loans, Savings Banks, Credit Unions, and Money Market Funds

Question 1

The total financial assets for savings and loans plus savings banks was over $2 .8 trillion in 2006.

Answer 1

False

Question 2

As of 2005, global membership in credit union is just over 157 million people of which almost 85 million reside in the United States.

Answer 2

True

Question 3

There are around 9500 credit unions in the United States as of 2005.

Answer 3

False

Question 4

From 1996 to 2000, what happened to the following three statistics? Total financial assets reported at year-end
Total deposits reported at year-end
Net income after taxes of U.S. Savings and Loans and Savings banks

A) 1 and 2 have increased; 3 has decreased
B) All three have increased
C) 1 has increased; 2 and 3 have decreased
D) All three have decreased
E) None of the above

Question 5

Most recently, which of the following thrift institution financial holding companies has the greatest total assets?

A) Washington Mutual, Seattle
B) Golden State Bancorp, San Francisco
C) Golden West Financial Corp., Oakland
D) Sovereign Bancorp, Philadelphia
E) Astoria Financial Corp., Lake Success

Question 6

From 1995 to 2000, what happened to the following three statistics? Total number of credit unions in the United States
Total number of credit union members in the United States U.S. Credit Union Assets

A) 1 has decreased; 2 and 3 have increased
B) All three have increased
C) 1 has increased; 2 and 3 have decreased
D) All three have decreased
E) None of the above

Question 7

How did savings and loans get started? How does the history of savings and loans compare with the history of savings banks? Which is the older financial institution?

Question 8

What exactly are "mutuals?"
How do these institutions differ from stockholder-owned depository institutions?

Question 9

Credit unions are one of the fastest growing financial intermediaries in the United States and in many other parts of the world as well. What factors have contributed to this rapid growth?

Question 10

What advantages do credit unions have over banks? What disadvantages do they face?

Question 11

How and why did money market funds begin to appear during the 1970s? What factors have contributed to their recent growth?

Question 12

Exactly how are money market funds different from banks and credit unions in their behavior and the assets they hold?

Question 13

If you are a small saver what advantages do money market funds appear to offer you relative to banks and credit unions? What disadvantages?

Question 14

If only 80 percent of the total of new funds raised will actually be available for making new auto loans, what is the minimum rate of return Axtell must earn in order to at least break even on these new loans?

Question 15

Interest rates are expected to rise substantially in the money market over the next several weeks or months and Stronghold's management is concerned that its relatively low current yield (a seven-day average of 4.05 percent, one of the lowest yields among existing money funds) may result in the loss of many of its more interest-sensitive share accounts. The fund's average maturity is currently at 34 days, also substantially less than the industry's current average maturity of about 45 days.
What steps would you recommend to help Stronghold Money Fund prepare for an apparent impending change in the money fund's condition?