Business funding

What is the primary function of financial intermediaries?

• To create new financial markets

• To act as a middleman between savers and borrowers

• To regulate financial markets

• • To print money

Which of the following is NOT a financial intermediary?

• Trading banks

• Credit unions

• Finance companies

• Government

What is the primary function of trading banks?

• To underwrite new security issues

• To accept deposits and provide loans

• To regulate the stock market

• To manage investment portfolios

Trading banks are also known as:

• Investment banks

• Savings and loan associations

• Commercial banks

• Central banks

What distinguishes trading banks from investment banks?

• Trading banks do not accept deposits

• Trading banks do not provide loans

• Trading banks deal with individual customers and small businesses, whereas investment banks primarily deal with corporate clients and large-scale investments

• Trading banks operate only in the stock market

Which of the following services is typically provided by merchant banks?

• Health insurance

• Underwriting and issuing of securities

• Retail banking services

• Agricultural loans

Merchant banks are also known as:

• Commercial banks

• Savings banks

• Investment banks

• Central banks

Which of the following is a common service offered by finance companies?

• Providing checking accounts

• Offering life insurance policies

• Providing consumer loans and leasing options

• Managing pension funds

How do finance companies typically assess the creditworthiness of borrowers?

• Based on their health records

• Based on their previous banking history

• Through credit scores and financial statements

• Through personal interviews only

Which of the following best describes the decision-making process in credit unions?

• Decisions are made by a board of directors elected by the members

• Decisions are made by the government

• Decisions are made by the CEO without member input

• Decisions are made by a small group of large investors