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AE 322-Midterms Formative Assessment #1: Alternate Response

The document contains a 10 question multiple choice assessment about financial institutions and intermediaries. It tests knowledge on topics like the functions of mutual funds, banks, cooperatives, insurance companies, and investment companies. It also addresses regulations, reporting requirements to the AMLC, and the roles of financial intermediaries and brokers.

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DJUNAH MAE ARELLANO
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70 views4 pages

AE 322-Midterms Formative Assessment #1: Alternate Response

The document contains a 10 question multiple choice assessment about financial institutions and intermediaries. It tests knowledge on topics like the functions of mutual funds, banks, cooperatives, insurance companies, and investment companies. It also addresses regulations, reporting requirements to the AMLC, and the roles of financial intermediaries and brokers.

Uploaded by

DJUNAH MAE ARELLANO
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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AE 322-Midterms Formative

Assessment #1
Alternate Response
Select TRUE if the statement is correct and FALSE if the statement is incorrect.

Financial intermediaries are not-for-profit organizations that do not seek to


make a profit.*

1 point

True
False

Mutual fund companies perform similar functions to banks in that they are
deposit-taking institutions that pay interest to their depositors.*

1 point

True
False

Financial institutions such as banks are prohibited from investing their funds in
the stock market or purchasing financial securities.*

1 point

True
False

Cooperatives provide their services to their members only, hence you have to
become a member to avail their services.*

1 point

True
False

Insurance companies perform functions that are similar to those of investment


companies.*

1 point

True
False

Financial regulations are critical for ensuring the financial system's stability
and integrity.*

1 point

True
False

Individuals can withdraw their pension funds at any time, even before they
reach retirement age.*

1 point

True
False

Financial institutions such as banks pays lower interest rates to depositors


and charge higher interest rates to borrowers.*

1 point

True
False

When a company decides to sell its stock to the public for the first time, it
hires the services of a broker or brokerage firm.*

1 point

True
False

Depositing P800,000 in the bank does not necessitate reporting to the


AMLC.*

1 point

True
False

AE 322-Midterms Formative
Assessment #1
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* Required

Multiple Choice
Choose the best answer.

The following are the advantages of financial intermediaries, except:*

2 points

None of the choices.


Provide guaranteed returns for investor to maximize their wealth.
Provides convenience to the borrowers of funds.
Economies of scale which reduces the costs of lending and borrowing.

The following are the common characteristics of financial intermediaries,


except:*

2 points

Maintains stability in the capital market.


Providing investment advice
Making the investors rich.
Providers of loans.

What is the main purpose of AMLC?*

2 points

None of the choices.


Investigate the source or origin of funds for transactions P500,000 and above.
Monitor all transactions of banks in the Philippines.
Provide insurance for bank deposits.

The institution that pools funds to different investors and invest these funds to
capital market securities such as stocks and bonds.*

2 points

Finance Companies
Cooperatives
Investment Companies
Mutual Funds

The following are the disadvantages of financial intermediaries, except:*

2 points

None of the choices.


Higher interest rates on loans.
Financial intermediaries charge commissions and fees.
Provides liquidity to the lenders of funds.

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