Policy Makers Are Particularly Concerned About the Financial Soundness of Financial

question 101

Multiple Choice

Policy makers are particularly concerned about the financial soundness of financial intermediaries because

• A)most financial assets are held by intermediaries.
• B)troubles of intermediaries always receive the most publicity in the media.
• C)the workings of intermediaries are easier for Congress to understand than are the workings of financial markets.
• D)federal law applies to intermediaries but does not currently apply to financial markets.

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Definitions:

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.

Petty Cash

Petty cash is a small amount of cash on hand used for covering minor and unplanned expenses in an organization.

Postage Stamps

Small pieces of paper issued by postal authorities that, when attached to mail, indicate the prepaid postage for its delivery.

Pass Key Access

A security mechanism that allows entry or access to a restricted area through the use of a physical or digital key.