Title: Financial Institutions
Course: Demo 1

Q: The purpose of a financial institution, such as a bank or credit union is to ________.
- act as an intermediary between savers and borrowers
- direct the flow of funds between savers and borrowers
- create financial products
A: act as an intermediary between savers and borrowers; direct the flow of funds between savers and borrowers

Q: A brokerage company is a nondepository institution. What are other nondepository institutions?
- finance companies
- insurance companies
- commercial banks
A: finance companies; insurance companies

Q: Institutions that accept deposits are called depository institutions. These institutions include:
- savings banks
- commercial banks
- credit unions
A: savings banks; commercial banks; credit unions

Q: The most common financial institutions in the United States, representing over 85% of the total assets held by banks are:
- credit unions
- savings banks
- commercial banks
A: commercial banks

Q: Sheila has $10,000 she wants to invest in individual company stocks she picked out after doing extensive research. What type of financial institution would best suit her needs?
- insurance company
- credit union
- brokerage firm
A: brokerage firm

Q: Financial institutions offer a variety of products and services. Some of these services include:
- debit and credit cards
- securities and financial advice
- home loans
A: debit and credit cards; securities and financial advice; home loans

Q: Rupert lives in the small town of Berwyn, PA and his bank is NOVA Bank. In September he had $200,000 in his bank account. One day at the end of October, Rupert went to withdraw $200 from the bank’s ATM and discovered that the Pennsylvania Department of Banking and Securities had closed NOVA Bank. The FDIC took over but was unable to find another financial institution to take over NOVA bank. What will happen to Rupert’s funds?
- The FDIC will not honor Rupert’s $200,000 because it is over the insurable limit.
- The Pennsylvania Department of Banking and Securities will send him a check for the full amount.
- The FDIC has insured Rupert’s $200,000 and will send him a check for the full amount.
A: The FDIC has insured Rupert’s $200,000 and will send him a check for the full amount.