FM 116 Chapter 10 Test Questions and Correct Answers
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Course
FM 116
Institution
FM 116
What is financial markets? Markets that transfer funds from savers to borrowers
What is a depository institution? A financial intermediary that obtains funds by accepting checking and savings deposits and then lending those funds to borrowers
What is a credit union? A depository institution that ...
FM 116 Chapter 10 Test Questions and
Correct Answers
What is financial markets? ✅Markets that transfer funds from savers to borrowers
What is a depository institution? ✅A financial intermediary that obtains funds by
accepting checking and savings deposits and then lending those funds to borrowers
What is a credit union? ✅A depository institution that is organized as a cooperative,
meaning that it is owned by its depositors
What is the savings and loan association? ✅A depository institution that has obtained
most of its funds by accepting savings deposits, which have been used primarily to
make loans
What are securities broker? ✅A financial intermediary that acts as an agent for
investors who want to buy and sell financial securities
A securities dealer? ✅A financial intermediary that participates directly in securities
markets, buying and selling stocks and other securities for its own account
What is an investment bank? ✅A financial intermediary that specializes in helping
firms raise financial capital by issuing securities in primary markets
What is the Federal Reserve Act of 1913? ✅The law that established the Federal
Reserve System as the central bank of the US
What is the Banking Act of 1933? ✅The law that established the FDIC to insure bank
deposits. Prohibited commercial banks from selling insurance or acting as investment
banks
What is the Securities Act of 1933? ✅The first major federal law regulating the
securities industry. It requires issuing new stock in a public offering to file a registration
statement with the SEC
What is the Securities and Exchange Act of 1934? ✅A federal law dealing with
securities regulation that established the SEC to regulate to regulate and oversee the
securities industry
What is the Securities and Exchange Commission? ✅The federal agency with primary
responsibility for regulating the securities industry
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