Q19. Which of the following terms refers to the interest level at which member b

Question

Q19. Which of the following terms refers to the interest level at which member banks can borrow money from the Federal Reserve System? a. discount rate b. key rate c. prime rate d. federal insurance premium e. reserve requirement

Q20. David has a savings account and a home mortgage with a financial institution. Each year, this institution sends him a dividend check based on his accounts. Which of the following financial institutions is David using here? a. commercial bank b. savings institution c. credit union d. savings and loan association e. mutual savings bank

Q21. Which of the following is an advantage of ETFs over mutual funds? a. ETFs can be traded throughout the day like a stock. b. ETFs have high operating expenses. c. ETFs do not require high initial investments. d. ETFs are not regulated by the government. e. ETFs are difficult to sell in a timely manner.

Q22. While it's invested, money grows by earning interest or yielding some other form of return. What is this known as? a. compound growth b. dividend c. capital gains d. security e. diversity

Q23. Javier wants to invest, but wants to reduce his risk of loss by spreading the total investment across more stocks. Javier would be most interested in which of the following? a. spreading b. shorting c. margin buying d. diversification e. asset allocation

Q24. In a secondary securities market, new stocks and bonds are bought and sold by firms and governments. a. True b. False

Q25. Dynamo Motors has begun to sell corporate securities. Dynamo is required by law to offer future investors the opportunity to read a document that contains complete information on both the new issue and the corporation itself. What is that required document called? a. book report b. affidavit c. prospectus d. order blank e. corporate profile

Explanation / Answer

19 - a. discount rate

20 - e. mutual savings bank

In mutual savings banks, all depositors are deemed owners of the bank. so all profits are proportionately divided among the depositors.

21 - a. ETFs can be traded throughout the day like a stock.

22 - a. Compound growth

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