Which of the Following Is True of Depository Institutions

question 54

Multiple Choice

Which of the following is true of depository institutions?

• A)Depository institutions seek to maximize profits.
• B)Depository institutions do not seek to maximize profits.
• C)Depository institutions do not make loans.
• D)Depository institutions make loans.
• E)Depository institutions receive funds primarily through customer deposits

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Definitions:

Ordinary Perpetuity

A series of equal cash flows that occur at the end of each period forever.

Ordinary Annuity

A series of equal payments made at the end of consecutive periods over a fixed length of time.

Compounded Quarterly

When an investment's interest is compounded quarterly, the interest is calculated and added to the principal four times a year.

Perpetuity

A financial instrument that provides a stream of infinite cash flows or payments.