Savings Institutions Quiz

If a savings institution's assets have a considerably longer duration than its liabilities, it can reduce its exposure to interest rate risk by

The primary use of credit union funds is

Interest-paying checkable accounts offered by credit unions are called

A savings institution owned by its depositors is a ____ savings institution.

• a. mutual

• b. stock

• c. credit

• d. closed-end

Most mortgages originated by savings institutions are for:

• commercial buildings

• land for commercial purposes

• single-family homes or multifamily dwellings

• None of these are correct.

Comparing credit unions with commercial banks and savings institutions

• credit unions are less able to quickly generate additional deposits.

• savings institutions and commercial banks can borrow from the Central Liquidity Facility, but credit unions cannot.

• savings institutions and commercial banks are less able to quickly generate additional deposits.

• credit unions have less exposure to liquidity risk.

To measure ____ risk, some savings institutions measure the duration of their respective assets and liabilities.

• a. credit

• b. interest rate

• c. liquidity

• d. None of these are correct.

____ do not represent an asset of credit unions.​

• Mortgage-backed securities

• Home equity loans

• Automobile loans

• Stocks

Savings institutions commonly ____ to reduce their risk.

• a. purchase futures contracts on stock indexes

• b. purchase futures contracts on Treasury bonds

• c. sell futures contracts on stock indexes

• d. sell futures contracts on Treasury bonds

Deposits at credit unions are called

• NOW accounts

• money market deposit accounts

• shares

• credit union deposit accounts