FIM Mid Exam One
Part I: Write “True” if the statement is correct and “False” if it is incorrect (1 pt. each).
1. Financial institutions are responsible for distributing financial resources in a planned
way.
2. Non-depository institutions, which are financial intermediaries that can accept deposits.
3. Pension funds are a type of depository institutions.
4. Financial risks are unexpected financial loss.
5. Operational risk is the risk associated with the operations of an organization.
Part II: Choose the Correct Answer Among the Following Alternatives (1 pt. each).
1. Which one of the following is correct about Functions of Financial Institutions
A. Accepting Deposits C. Providing Mortgage Loans
B. Issuing Share Certificates D. All of the above
2. Which of the following one is not a types of depository institutions
A. Commercial banks C. Pension funds
B. Savings and loan associations D. All of the above
3. ________is the possibility of loss caused by changes in the market variables such as
interest rate, foreign exchange rate, equity price and commodity price.
A. Regulatory risk C. Environmental risk
B. Market risk D. Credit risk
4. Which of the following one is not a type of non- depository institution
A. Commercial banks C. Pension funds
B. Securities firms D. None of the above
5. Banks are further subcategorized depending on:
A. The markets they serve C. The geographic extent
B. Type of ownership D. All are correct
Part III: Matching (5 Pts)
A B
1. Credit risk A. Risk arise due to changes in the market variables
2. Market risk B. Risk arise due to technological advancement
3. Operational risk C. Risk arise due to failed internal process
4. Regulatory risk D. Risk arise due to better governance issues
5. Environmental risk E. Risk arise due to inability or unwillingness
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FIM Mid Exam One
Part IV- Short Answer Questions (5 Pts)
1. List at least two roles of financial intermediaries.(2 pts)
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2. Define what is financial risk mean?(1pts)
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3. Write at least two functions of financial institutions. ( 2 pts)
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