Quiz chapter 15 - Nonbank finacial institutions Flashcards Preview

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Flashcards in Quiz chapter 15 - Nonbank finacial institutions Deck (18):
1

1. Building societies fund long-term residential mortgages with short-term consumer savings deposits.
a. True
b. False

T

2

2. Interest bearing securities are the most significant source of funding for building societies.
a. True
b. False

F

3

3. Building societies diversified their product base to a full range of products such as deposit accounts,
credit cards, investment savings accounts, mortgages, business loans and Internet banking services.
a. True
b. False

T

4

4. Building societies are authorised deposit-taking institutions (ADIs) approved by the Australian
Prudential Regulation Authority (APRA) and the accept retail deposits.
a. True
b. False

T

5

5. Finance companies make loans to both consumers and businesses and accept deposits from the
public to obtain funds.
a. True
b. False

F

6

6. Building societies assume interest rate risk because maturities of their liabilities and assets are
typically unmatched.
a. True
b. False

T

7

7. Retail deposits are the primary source of funds for building societies.
a. True
b. False

T

8

8. Building societies have been able to attract more capital investment by becoming corporations with
contributing equity investors.
a. True
b. False

T

9

9. Building societies use credit derivatives to shift interest and credit risk to third parties.
a. True
b. False

F

10

10. Large finance companies often use purchased funds to back up their commercial paper and obtain
higher ratings on it.
a. True
b. False

F

11

11. Credit union capital predominantly consists of shareholders' equity.
a. True
b. False

F

12

12. Credit union capital accounts contain a capital account known as 'redeemed preference shares'
which represents the balance of shares issued to members.
a. True
b. False

F

13

13. Debt consolidation companies are companies that specialise in a particular type of finance product.
a. True
b. False

F

14

14. A prospective member must purchase a 'membership share' in credit union to become a member
and have access to its services.
a. True
b. False

T

15

15. Finance companies also operate private-label credit plans for retailers who can borrow up to his or
her credit limit many times.
a. True
b. False

F

16

16. Wholesale financing is generated when a finance company helps a dealer finance the purchase of
goods.
a. True
b. False

T

17

17. Finance companies raise funds from wholesale markets and retail investors and then provide loans
to households and small-to-medium-sized enterprises.
a. True
b. False

T

18

18. A key asset for finance companies is their personal.
a. True
b. False

F