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FINANCIAL INSTITUTIONS AND MARKETS
This test covers the functions of financial institutions and markets in the allocation of funds process; the various factors which influence the allocation and pricing of funds as they make their way through the financial markets; the forces that affect the supply of funds to and the demand of funds from the market, including regulation, influence of the central banking system, innovation, and changes in institutional relationships; the international financial system. (3 s.h.) FIN-331-TE
This is a 2-hour examination that consists of 100 multiple-choice questions (worth 1 point each).
A passing score is 60 out of 100 points.

Here are the major topics covered and their approximate importance on the test:
I.

FINANCIAL MARKETS

(35%)

A. Financial markets and financial instruments
B. Interest rates and financial market analysis
C. Structure of interest rates
II.

FINANCIAL INSTITUTIONS

(35%)

A. Banks and other financial intermediaries
B. The flow of funds through financial intermediaries
C. Regulation of financial institutions
III.

INTERNATIONAL FINANCE

(10%)

A. Determination of foreign-exchange rates
B. International financial institutions and markets
C. Current issues in international finance
IV.

CURRENT ISSUES
A.
B.
C.
D.
E.
F.
G.
H.

(20%)

Deregulation and regulatory reform
The mortgage market
Futures and options
Branch banking
Deposit insurance
Money and interest-rate relationships
Inflation and income policies
Other issues

Textbooks to help you prepare:
Either text will provide appropriate preparation for this examination.
Mishkin, Frederic S. and Stanley G. Eakins. Financial Markets & Institutions.
Current or last edition. Boston: Pearson/Prentice-Hall
Madura, Jeff. Financial Markets and Institutions.
Current or last edition. Mason, OH: South-Western/Cengage Learning

SAMPLE QUESTIONS
1.

What is the primary function of large, diversified brokerage