B. although brokerage firms can offer some banking services, they typically are less efficient at providing them than banks, because they specialize in buying and selling securities. C. brokerage firms are becoming serious competitors for banks and other depository institutions by offering high-yield combination savings and checking accounts and money market accounts, as well as certain types of loans. D. although brokerage firms offer attractive banking services, federal law prohibits individual investors from holding both a checking account and a securities account with the same firm. Brokerage firms are becoming serious competitors for banks by offering high-yield combination savings and checking accounts and other types of accounts. Brokers can also make loans to their customers, using the customers' securities as collateral. AACSB: Reflective Thinking Bloom's: Application Learning Goal: 20-4 Level of Learning 3: Application of principles Topic: Other Financial Institutions (Nonbanks) 273. (p. 558) The community college where Jake works requires all employees to contribute to a pension fund. At this time, he is not too worried about the safety of this contribution because: A. the pensions fund's investments are always backed by the full faith and credit of the U.S. government. B. pension funds are nonbanks so they are not going to take this money and lend it to others. C. he is considered a state employee, and as such, he is protected from this fund going bankrupt. D. pension funds usually make conservative investments. Pension funds are provided by some corporations and government employers as retirement accounts for their employees. Pension funds are usually bound by rules and regulations requiring them to only invest in low-risk securities. AACSB: Reflective Thinking Bloom's: Application Learning Goal: 20-4 Level of Learning 3: Application of principles Topic: Other Financial Institutions (Nonbanks) 20-153
Chapter 20 - Money, Financial Institutions, and the Federal Reserve 274. (p. 558) Shana works as an investment specialist for the Teamsters Union Central States Pension Fund. Her job involves deciding how to invest the contributions paid into the fund. Which of the following statements about Shana's job are true? A. She works for a bank. B. She will probably invest most of the pension's funds in safe corporate stocks and other conservative investments such as government securities. C. In order to qualify for maximum tax benefits, the funds Shana invests all must be contributed by the companies who employ members of the Teamsters Union, rather than by the union members themselves. D. The purpose of the investments Shana is making is to increase the current pay of union members. Pension funds are amounts of money set aside by organizations to help meet the financial needs of their members when they retire. Pension funds are considered to be nonbanks.
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