LOMA 281 Module 1 Lesson 2 Study
Questions and Correct Answers
Financial services industry ✅An industry in which financial institutions help people,
businesses, and governments with their asset accumulation, asset management, and
asset protection needs
Financial institutions ✅A business that owns primarily financial assets, such as stock
and bonds, rather than fixed assets, such as equipment and raw materials
Depository institution ✅A financial institution that specializes in accepting deposits and
making loans
Securities firm ✅A financial institution that issues securities and engages primarily in
investing and trading securities
Mutual fund companies ✅A financial institution that pools money from many, often
thousands, of investors to build diversified portfolios of investment securities.
Finance companies ✅A financial institution that specializes in making short- and
medium-term loans to businesses and people
Insurance company ✅A company that accepts risk and makes a promise to pay a
policy benefit if the covered loss does occur
Convergence ✅The movement toward a single financial institution being able to serve
a customer's banking, insurance, and securities needs
Consolidation ✅The combining of financial services institutions primarily through
mergers and acquisitions. Consolidation results in fewer traditional financial services
institutions
Merger ✅Two companies are combined into one company. One company survives as
a legal entity and the other company ceases to exist
Acquisition ✅One company purchases a controlling interest in another company. After
the acquisition, both companies continue to exist as legal entities. Acquisitions can
include the purchase of an entire company or just one line of business
Globalization ✅The tendency of businesses, technologies, or philosophies to spread
throughout the world
Questions and Correct Answers
Financial services industry ✅An industry in which financial institutions help people,
businesses, and governments with their asset accumulation, asset management, and
asset protection needs
Financial institutions ✅A business that owns primarily financial assets, such as stock
and bonds, rather than fixed assets, such as equipment and raw materials
Depository institution ✅A financial institution that specializes in accepting deposits and
making loans
Securities firm ✅A financial institution that issues securities and engages primarily in
investing and trading securities
Mutual fund companies ✅A financial institution that pools money from many, often
thousands, of investors to build diversified portfolios of investment securities.
Finance companies ✅A financial institution that specializes in making short- and
medium-term loans to businesses and people
Insurance company ✅A company that accepts risk and makes a promise to pay a
policy benefit if the covered loss does occur
Convergence ✅The movement toward a single financial institution being able to serve
a customer's banking, insurance, and securities needs
Consolidation ✅The combining of financial services institutions primarily through
mergers and acquisitions. Consolidation results in fewer traditional financial services
institutions
Merger ✅Two companies are combined into one company. One company survives as
a legal entity and the other company ceases to exist
Acquisition ✅One company purchases a controlling interest in another company. After
the acquisition, both companies continue to exist as legal entities. Acquisitions can
include the purchase of an entire company or just one line of business
Globalization ✅The tendency of businesses, technologies, or philosophies to spread
throughout the world
