Financial Institutions Quiz

What is the role of financial institutions in business?

• They manufacture goods.

• They enable business to take place smoothly.

• They provide legal advice.

• They create marketing strategies.

Which of the following is an example of a financial intermediary?

• A manufacturing company

• A retail store

• A bank

• A law firm

What do financial intermediaries do?

• They produce consumer goods.

• They channel funds from savers to borrowers.

• They design financial software.

• They regulate stock markets.

What do the variety of financial institutions reveal about borrowers and lenders?

• Simple requirements

• Complex requirements

• No requirements

• Unchanging requirements

Which of the following is NOT an example of an organization that channels funds to those that require them?

• Banks

• Building societies

• Investment trusts

• Retail stores

In which markets do financial institutions operate?

• Short-term (money) market and long-term (capital) market

• Short-term (capital) market and long-term (money) market

• Only short-term (money) market

• Only long-term (capital) market

What is the main activity in the money market?

• Lending funds for periods of five years or more

• Lending funds for periods from overnight up to about one year

• Lending funds for periods of one to five years

• Lending funds for periods of ten years or more

What does the capital market focus on?

• Borrowing and lending for periods of one to five years

• Borrowing and lending for periods of five years or more

• Borrowing and lending for periods from overnight up to about one year

• Borrowing and lending for periods of ten years or more

What is the term used for the market involving periods of one to five years?

• Money market

• Capital market

• Medium-term market

• Long-term market

What is one of the main functions of financial institutions?

• To provide entertainment services

• To help businesses manage risks by providing insurance

• To manufacture consumer goods

• To offer educational courses