Techno Star College
Department of Accounting and Finance
MANGING FINANCIAL INSITITUTIONS (ASSIGNMENT) (40%)
Name _____________________________ Id _______________
PART I - Write True Or False For The Following Questions (2marks Each)
1. All financial assets are recorded as a liability or claim on some other economic unit’s
balance sheet.
2. Saving and loan association are among the largest of all thrift
3. Financial systems are fragile and vulnerable to crisis
4. The goal of government regulation is removing all the risk that investors face
5. One of the Arguments against regulation is room for monopolies to emerge
Part II: Choose The Best Answer From A Given Alternative(2 Mark Seach)
1. Which of the following is not a depository institution?
A. Commercial banks B. savings and loan associations
C. credit unions D. Mutual funds E. All
2. One of the following is not the advantages of insurance?
A. financial compensation B provision of fund for investment
C it increase worry D. encourage saving and efficient utilization of resource
3. Which of the following is the function of financial system?
A. Savings function C. Wealth function
B. Liquidity function D. All
4. Which of the following is/are banking activities?
A. Retail banking C. Investment banking
B. Commercial banking D. All
5_______, have the purpose of promoting thrift, providing credit at reasonable rates,
and providing other financial services to its members.
A. Credit unions C. Building societies
B. Land development banks D. International associations
6. What are the main functions of commercial banks?
A. Accepting deposits from the public and advancing them loans
B. Discounting of bills of exchange
C. Invest fund in different securities
D. Function as agents and representatives of their customers
7. A type of bank that provides services such as accepting deposits, making business
loans and offering basic investment products is called
A. Commercial bank C. Development bank
B. Investment bank D. Central
8. Which of the following item is a not asset of banks?
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A. Money at call and Short-Notice B. Bills Discounted and Purchased
C. Investments D. Deposits
9. Why central bank is called as banker of banks?
A. Because it serves as a custodian of the cash reserves of the commercial banks
B. It is the lender of the last resort
C. It can serve as clearing agent
D. All
10. What is the advantage of giving the monopoly right of note issue to the central
bank?
A. It brings uniformity in the monetary system of note issue and note circulation.
B. The central bank can exercise better control over the money supply in the country.
C. It enables the central bank to exercise control over the creation of credit by the
commercial banks.
D. All
11. Which of the following is not major function of central bank?
A. It is bank of note issue
B. It is banker, advisor, and agent to the government
C. It is executive of political scenarios of respective country
D. It is bankers of banks
12. Which of the following activity is the regulation of the financial system
A. The degree of competition in a market
B. The protection of consumers of financial services
C. The encouragement of small investors
D. The capital adequacy of financial institutions,
E. All
13. Which of the following forms of regulation help to minimize the problem of asymmetric
information?
A. Disclosure regulation
B. Regulation of foreign participants
C. Financial activity regulation
D. All of the above
E. A and C
14. Which of the following regulation is not done for Initial creation of depository institutions?
A. Initial licensing and chartering
B. Location and number of physical branches, offices
C. Mergers and acquisitions
D. Minimum cash and capital requirements to open
E. All
15. Which of the following is General Principles of Bank Management?
A. Liquidity Management
B. Asset Management
C. Liability Management
D. All
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