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

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

Pension funds are the largest category of institutional investors, with trillions of dollars in assets under management. They are typically set up by employers to provide retirement benefits for their employees, which are funded by contributions from both the employer and the employee. Pension funds invest in a range of different assets, including stocks, bonds, and real estate, with the goal of generating returns that will enable them to meet their pension obligations over the long term.

Question 3

Pension funds represent a declining segment of the institutional market.

Accepted Answer

False

Question 4

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.

Question 5

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 represent organizations that are responsible for bringing together large pools of capital for reinvestment.

Question 6

___________ 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.

Deck 24: The Makeup of Institutional Investors