Financial Banks

Question 1

Savings and Loan Associations
Mutual Savings Banks 
Credit Unions 
Commercial Banks 
What is the source of funds of these banks?

Answer 1

Deposits

Question 2

Primary Assets of SMCC

Answer 2

Mortgages
Mortgages
Consumer Loans
Business and Consumer Loans

Question 3

Insurances
Pension Funds
Fire and Casualty Insurance
Source of Funds

Answer 3

Premiums
Employer and Employees
Municipal Bonds, Corporate Company Bonds

Question 4

Finance Companies
Mutual Funds
Money Market Mutual Funds

Answer 4

Commercial Paper
Shares
Shares

Question 5

Financial Instruments

Answer 5

Equity Securities

• Ordinary Share Capital
• Preference Share Capital

Debt Securities

• Treasury Bills
• Treasury Bonds
• Corporate Bonds

Question 6

Financial Securities which are simply pieces of paper with contractual provisions that entitle their owners to specific rights and claims on specific cash flows or values.

Answer 6

Financial Instruments

Question 7

these are securities that represent ownership in a company or rights to acquire ownership interests at an agreed-upon determinable price.

Answer 7

Equity Securities

Question 8

It entitles the holder to n an equal or pro-rata division of profits without any preference or advantage over any class of stocks or equity securities.

Answer 8

Ordinary Share Capital

Question 9

It entitles the holder to enjoy priority as to distribution of dividends and distribution of assets upon corporate liquidation.

Answer 9

Preference Share Capital

Question 10

These are instruments representing representing a creditor relationship with an enterprise.

Answer 10

Debt Securities

Question 11

Characteristics of Debt Securities

Answer 11

maturity value
periodic interest payment at a fixed or variable interest rate
maturity date.

Question 12

There are three types of Debt Securities

Answer 12

Treasury Bills
Treasury Bond
Corporate Bonds

Question 13

Treasury Bills

Answer 13

are government securities issued by the bureau of the treasury which mature in less than a year

Question 14

are government securities issued by the Bureau of the Treasury which mature beyond one year

Answer 14

Treasury Bonds

Question 15

These are debt obligations issued by corporations to raise money in order to expand their businesses.

Answer 15

Corporate Bonds

Question 16

A place where individuals and organizations wanting to borrow funds are brought together with those having a surplus of funds

Answer 16

Financial Markets

Question 17

Types of Financial Markets

Answer 17

Physical Assets vs Financial Assets 
Money vs Capital 
Primary vs Secondary 
Spot vs Futures 
Public vs Private

Question 18

depicts the general flow of funds through and between financial institutions and financial markets.

Answer 18

Financial Management Framework

Question 19

direct transfers of money and securities as shown in the too section occur when a business sells its stocks or bonds directly to savers, without going through any type of financial institutions

Answer 19

Direct Financing

Question 20

transfers may also go through a financial intermediary like an investment bank.

Answer 20

Indirect Financing through investment banks

Question 21

Transfers can also be made through a financial intermediary such as bank, an insurance company or mutual fund.

Answer 21

Indirect Financing through other financial intermediaries

Question 22

overseeing financial planning, strategic planning and controlling the firm’s cash flow

Answer 22

CFO

Question 23

financial activities, including cash and credit management, making capital expenditure decisions

Answer 23

Treasurer

Question 24

Accounting duties, financial statements, cost accounting

Answer 24

Controller

Question 25

Under Treasurer

Answer 25

Capital Expenditure 
Credit Manager 
Foreign Exchange 
Pension Fund Manager 
Cash Manager 
Financial planning and fund raising manager

Question 26

Under controller

Answer 26

Tax manager
Cost Accounting Manager
Corporate Accounting manager
Financial Accounting Manager