tb12 - Chapter 12 Nonbank Finance T Multiple Choice 1) The...

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Chapter 12 Nonbank Finance T Multiple Choice 1) The federal regulatory agency responsible for regulating the activities of life insurance companies is (a) the FDIC. (b) the Fed. (c) the FHLBS. (d) none of the above; there is no such federal regulatory agency. Answer: D Question Status: Previous Edition 2) Which of the following is true of life insurance companies? (a) They hold long-term assets that are not particularly liquid. (b) They hold short-term liquid assets. (c) Payouts to policyholders are relatively predictable. (d) Both (a) and (c) of the above. Answer: D Question Status: Previous Edition 3) Life insurance companies are regulated by state governments because (a) they have never experienced bankruptcy. (b) they have never experienced profitability. (c) they have never experienced widespread failures. (d) they hold only highly liquid assets. (e) they are insured by the federal government. Question Status: New 4) The insurance industry’s share of total financial intermediary assets fell because of (a) poor investment returns in the 1960s and 1970s. (b) widespread failures of life insurance companies. (c) federal regulations limiting the sale of life insurance. (d) unpredictability of payouts. (e) all of the above. Answer: A Question Status: New
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Frederic S. Mishkin • Economics of Money, Banking, and Financial Markets, Seventh Edition 5) An example of permanent insurance is __________ insurance, and an example of temporary insurance is _____ insurance. (a) whole life; universal (b) whole life; variable life (c) whole life; term (d) term; whole life (e) term; variable life Answer: C Question Status: New 6) A contract requiring payment of an annual premium in exchange for the payment of a future stream of payments beginning at a specified age and continuing until death is (a) whole life insurance. (b) an annuity. (c) term life insurance. (d) variable life insurance. (e) universal life insurance. Answer: B Question Status: New 7) The key factor causing life insurance companies to move into the management of pension funds was (a) the investment expertise of insurance companies. (b) a request for this change by managers of pension funds. (c) a change in state laws. (d) a change in federal legislation. (e) all of the above. Answer: D Question Status: New 8) Property and casualty insurance companies hold the largest share of their assets in (a) long-term government bonds. (b) short-term government securities and commercial paper. (c) tax-exempt municipal bonds. (d) medium-term corporate bonds. Answer: C Question Status: Previous Edition 9) Property and casualty insurance companies are organized (a) both as stock and mutual companies. (b) only as stock companies. (c) only as mutual companies.
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This note was uploaded on 10/17/2011 for the course ECON 317 taught by Professor Guidry during the Spring '11 term at Nicholls State.

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tb12 - Chapter 12 Nonbank Finance T Multiple Choice 1) The...

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