What is the primary function of financing institutions?

• To provide insurance services exclusively.

• To manage government debt and fiscal policies.

• To regulate interest rates for banks.

• To provide funds and financial services to support economic activities.

How does insurance help individuals manage risk?

• Insurance provides financial protection and risk transfer, helping individuals manage potential losses.

• Insurance increases the likelihood of accidents

• Insurance guarantees no financial loss

• Insurance is only for businesses and not individuals

What role do capital markets play in the economy?

• Capital markets are a form of government regulation.

• Capital markets are only relevant for small businesses.

• Capital markets primarily focus on consumer goods sales.

• Capital markets play a crucial role in the economy by enabling capital formation, providing liquidity, and facilitating investment and growth.

What are the main benefits of joining a savings cooperative?

• High penalties for withdrawals

• No community involvement

• Higher interest rates, lower fees, community support, and financial education.

• Limited access to funds

How do microfinance institutions support small businesses?

• Microfinance institutions support small businesses by providing accessible loans, financial education, and business support services.

• By providing free products to all businesses

• By giving grants without any requirements

• By offering investment opportunities in foreign markets

What types of financing do leasing companies typically provide?

• Operating leases, capital leases, finance leases

• Equity financing

• Short-term loans

• Crowdfunding

In what ways can insurance companies diversify their portfolios?

• By focusing solely on one type of insurance

• By reducing customer service efforts

• By limiting investment opportunities

• By expanding product lines, entering new markets, investing in diverse assets, forming partnerships, and using reinsurance.

What are the key differences between stocks and bonds in capital markets?

• Stocks represent ownership in a company; bonds represent a loan to an entity.

• Stocks are always less risky than bonds.

• Stocks pay fixed interest rates while bonds do not.

• Bonds provide ownership in a company; stocks are a type of loan.

How do savings cooperatives promote financial inclusion?

• By focusing solely on profit maximization without community involvement.

• Savings cooperatives promote financial inclusion by offering accessible financial services and fostering community development.

• By restricting access to financial services for low-income individuals.

• By providing loans with extremely high interest rates to members.

What impact do microfinance institutions have on poverty alleviation?

• Microfinance institutions primarily focus on providing free housing.

• Microfinance institutions help alleviate poverty by providing access to financial services, enabling entrepreneurship, and promoting economic stability.

• Microfinance institutions discourage entrepreneurship and innovation.

• Microfinance institutions have no effect on economic stability.