Question

question 12

mariam wants life insurance to secure her familys future, whereas amira is looking to lease a car. they understand that certain financial organizations offer key services without accepting deposits, unlike banks.

which of these options best describes a non-deposit financial institution?

a pension fund managed by the federal government for retired workers.

a government agency responsible for managing monetary policy and issuing currency.

a cooperative bank owned by its depositors offering full banking services.

an organization that offers financial services like insurance or investment advice but does not accept checking or savings deposits

Explanation:

Define non-deposit institutions

Using the Financial Institutions knowledge point

Non-deposit financial institutions are organizations that provide financial services but do not accept traditional checking or savings deposits from customers. Instead, they generate funds through other means, such as selling insurance policies, managing pension plans, or offering investment products.

Analyze the options

• Option 1: Describes Social Security or a public pension program, which is a specific government program rather than the general definition of a non-deposit financial institution.
• Option 2: Describes a central bank (like the Federal Reserve), which manages monetary policy.
• Option 3: Describes a credit union or cooperative bank, which is a deposit-taking institution.
• Option 4: Directly matches the definition of a non-deposit financial institution by stating it offers services like insurance or investment advice without accepting checking or savings deposits.

Answer:

• A pension fund managed by the federal government for retired workers.
• A government agency responsible for managing monetary policy and issuing currency.
• A cooperative bank owned by its depositors offering full banking services.
• An organization that offers financial services like insurance or investment advice but does not accept checking or savings deposits (Correct answer)