What is the role of finance companies

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Reference no: EM133115214

Q1. Mutual funds are classified as

a) Stock (or equity) mutual funds

b) Bond mutual funds

c) Balance funds

d) All the above answers are correct

Q2. What is the role of finance companies?

a) Finance companies provide various forms of insurance and investment services to individuals and charge a fee (called a premium) for this financial service.

b) Finance companies provide short- and intermediate-term credit to consumers and small businesses.

c) Finance companies take money from many investors and uses it to make investments based on a stated investment objective.

d) Finance companies facilitate new issues of stock by advising how much stock the firm can issue, deter- mining the appropriate price for the stock, under- writing the stock, and distributing the stock.

Q3. What are the risks that insurance companies face? [can select more than 1 answer]

a) Interest rate risk

b) Credit risk

c) Market risk

d) Liquidity risk

Q4. What are the risks that securities firms face? [can select more than 1 answer]

a) Interest rate risk

b) Credit risk

c) Market risk

d) Liquidity risk

Q5. Stock mutual fund's valuation is influenced by [can select more than 1 answer]

a) stock market conditions

b) conditions in that sector

c) the abilities of fund managers

d) risk premium

Reference no: EM133115214

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