#1
What is the primary function of a savings institution?
To encourage saving and provide interest on deposits
ExplanationEncourages saving and offers interest on deposits.
#2
Which of the following is a characteristic of a savings institution?
Customer-owned cooperative
ExplanationOperates as a customer-owned cooperative.
#3
Which regulatory body oversees savings institutions in the United States?
Federal Deposit Insurance Corporation (FDIC)
ExplanationFDIC oversees savings institutions in the US.
#4
What is a major source of funding for savings institutions?
Customer deposits
ExplanationCustomer deposits are a significant funding source.
#5
What is a common feature of savings institutions compared to commercial banks?
Emphasis on serving local communities
ExplanationEmphasizes serving local communities.
#6
Which of the following is NOT a type of savings institution?
Credit card company
ExplanationCredit card company is not a type of savings institution.
#7
Which of the following is a risk faced by savings institutions?
All of the above
ExplanationAll the listed options pose risks to savings institutions.
#8
What is the purpose of the Federal Home Loan Bank System (FHLBank System) in the United States?
To provide liquidity and funding for savings institutions
ExplanationFHLBank System provides liquidity and funding.
#9
Which of the following is a function of the Federal Reserve System?
Setting monetary policy
ExplanationFederal Reserve sets monetary policy.
#10
Which of the following is an example of a savings institution?
Credit union
ExplanationA credit union is an example of a savings institution.
#11
What role do savings institutions play in the economy?
They provide liquidity to financial markets
ExplanationContributes liquidity to financial markets.
#12
Which legislation had a significant impact on the operations of savings institutions in the 1980s?
Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
ExplanationFIRREA had a significant impact in the 1980s.
#13
What is a key difference between savings institutions and credit unions?
Savings institutions are owned by their customers
ExplanationOwned by customers, different from credit unions.
#14
What is a key benefit of a savings institution converting from a mutual to a stock form?
Increased access to capital markets
ExplanationConversion provides increased access to capital markets.
#15
What impact can a decrease in interest rates have on savings institutions?
All of the above
ExplanationDecrease in interest rates affects savings institutions in various ways.
#16
What is a key difference between savings institutions and investment banks?
Investment banks do not accept deposits
ExplanationInvestment banks do not accept deposits like savings institutions.