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FINA 365-Ch. 3 Exam with Questions and Answers What is the primary function of finance companies? A. Protect individuals and corporations from adverse events. B. Make loans to both individuals and corporations. C. Extend loans to banks and other financial institutions. D. Pool the financial resources of individuals and companies and invest in diversified portfolios of assets. E. Assist in the trading of securities in the secondary markets. ANSWER✓✓ B Which of the following is NOT a type of finance company? A Sales finance institutions. B Personal credit institutions. C Business credit institutions. D Captive finance company. E All of these are types of finance companies. ANSWER✓✓ E Factoring involves A making loans to customers that depository institutions find too risky to lend. B providing financing for the purchase of products manufactured by the parent company. C approving of collateral that depository institutions do not find acceptable.
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