Financial Planning – Exam 2 Review Questions, 2026 – Study Material
and Practice Questions
Commercial Banks: - correct answer ✔✔ accept deposits in checking and saving accounts and
make loans to both commercial and personal clients
Savings Institutions: - correct answer ✔✔ accept deposits but focus on providing mortgage and
personal loans to individuals rather than commercial clients.
Credit Unions: - correct answer ✔✔ are nonprofit organizations that accept deposits and
provide personal and mortgage loans only to their members. Credit unions serve members who
have a common affiliation (such as the same employer or the same community).
Finance companies provide personal loans to: - correct answer ✔✔ Individuals.
These loans are usually at higher rates to individuals at a higher risk of defaulting on the loan.
Securities companies facilitate the purchase
or sale of securities by firms or individuals by: 3 ways, what is the 1st way? - correct answer ✔✔
finding investors to purchase a firm's securities
Securities companies facilitate the purchase
or sale of securities by firms or individuals by: 3 ways, what is the 2nd way? - correct answer
✔✔ providing advice to firms selling securities, such as the amount and price of securities to be
sold
Securities companies facilitate the purchase
, or sale of securities by firms or individuals by: 3 ways, what is the 3rd way? - correct answer ✔✔
providing firms with advice for mergers, such as valuation and potential benefits. Securities
firms also provide brokerage services, helping to make a market for stocks and bonds by
matching buyers and sellers
Financial Conglomerates are: - correct answer ✔✔ financial institutions that offer a diverse set
of financial services to individuals or firms. They offer a diverse set of financial services such as
accepting deposits, providing loans, offering credit cards, providing brokerage services,
providing insurance services, etc.
(Ex: BofA, Citigroup, Merrill Lynch)
Services offered by Financial Institutions: - correct answer ✔✔ checking services that include
debit cards and ATMs that monitor your account balance, reconciling your account balance,
accessing your account balance through an automated phone service or online, electronic
checking, depository (savings) accounts, and personal loans.
Credit Cards: - correct answer ✔✔ allows you to purchase goods and services on credit, within
your credit limits. If you do not pay off your entire balance each month, you will incur a finance
charge
Debit Cards: - correct answer ✔✔ payment comes directly from your checking account
What are things you should take in to consideration when selecting a bank? - correct answer
✔✔ (1) should consider the convenience of making deposits and withdrawals, including ATM
locations and the availability of Web-based access.
(2) should also consider interest rates paid to depositors and minimum balance requirements.
(3)Finally, you should consider fees such as service charges, per check charges, and ATM use
charges.
and Practice Questions
Commercial Banks: - correct answer ✔✔ accept deposits in checking and saving accounts and
make loans to both commercial and personal clients
Savings Institutions: - correct answer ✔✔ accept deposits but focus on providing mortgage and
personal loans to individuals rather than commercial clients.
Credit Unions: - correct answer ✔✔ are nonprofit organizations that accept deposits and
provide personal and mortgage loans only to their members. Credit unions serve members who
have a common affiliation (such as the same employer or the same community).
Finance companies provide personal loans to: - correct answer ✔✔ Individuals.
These loans are usually at higher rates to individuals at a higher risk of defaulting on the loan.
Securities companies facilitate the purchase
or sale of securities by firms or individuals by: 3 ways, what is the 1st way? - correct answer ✔✔
finding investors to purchase a firm's securities
Securities companies facilitate the purchase
or sale of securities by firms or individuals by: 3 ways, what is the 2nd way? - correct answer
✔✔ providing advice to firms selling securities, such as the amount and price of securities to be
sold
Securities companies facilitate the purchase
, or sale of securities by firms or individuals by: 3 ways, what is the 3rd way? - correct answer ✔✔
providing firms with advice for mergers, such as valuation and potential benefits. Securities
firms also provide brokerage services, helping to make a market for stocks and bonds by
matching buyers and sellers
Financial Conglomerates are: - correct answer ✔✔ financial institutions that offer a diverse set
of financial services to individuals or firms. They offer a diverse set of financial services such as
accepting deposits, providing loans, offering credit cards, providing brokerage services,
providing insurance services, etc.
(Ex: BofA, Citigroup, Merrill Lynch)
Services offered by Financial Institutions: - correct answer ✔✔ checking services that include
debit cards and ATMs that monitor your account balance, reconciling your account balance,
accessing your account balance through an automated phone service or online, electronic
checking, depository (savings) accounts, and personal loans.
Credit Cards: - correct answer ✔✔ allows you to purchase goods and services on credit, within
your credit limits. If you do not pay off your entire balance each month, you will incur a finance
charge
Debit Cards: - correct answer ✔✔ payment comes directly from your checking account
What are things you should take in to consideration when selecting a bank? - correct answer
✔✔ (1) should consider the convenience of making deposits and withdrawals, including ATM
locations and the availability of Web-based access.
(2) should also consider interest rates paid to depositors and minimum balance requirements.
(3)Finally, you should consider fees such as service charges, per check charges, and ATM use
charges.
