Management Chapter 17

Which of the following banks is organized as a nonprofit business?

• Credit Union

• Mutual Savings Bank

• Savings and Loan Organization

• Commercial Bank

A company that pools the resources of a large number of investors and uses that money to make a variety of investments is a

• Savings and Loan

• Finance Company

• Mutual Fund

• Insurance Company

Transferring money by computer rather than by check is known as

• Automated Cash Transfer (ACT)

• Automated Transfer Machine (ATM)

• Computerized Money Movement (CMM)

• Electronic Funds Transfer (EFT)

Internet banks can operate at a lower cost than traditional banks because

• They do not have to meet the same government regulations

• They need fewer and less expensive buildings

• They locate their offices in other countries with lower labor costs

• They serve more customers than even the largest traditional banks

Treasury instruments are considered low-risk investments because they

• Are issued in very small denominations

• cannot be traded

• are backed by the US government

• None of the above

When money is spread among many types of investments, the investor has

• diversified the investments

• Increased the risk

• Emphasized growth

• Reduced the initial cost

Which type of investment instrument would usually pay the lowest interest rate?

• Money Market Account

• Savings account

• CD

• Treasury Bill

Of the following investment options, the one with the highest risk is the

• Treasury Bill

• Savings account

• Mutual Fund

• Money Market Fund

Match the Definition. Financial institution that accepts demand deposits, make consumer and commercial loans, and buy and sell currency and government securities.

• Prime Rate

• Bank

• Demand Deposit

• FDIC

Money put into a financial institution that the depositors can withdraw at any time without a penalty.

• Consumer Loan

• Fixed interest rate

• Demand Deposit

• Endorsement