1. Commercial banks, mutual savings banks, and credit unions borrow money from their customers and lend that money to other customers.

a. True

b. False

2. Financial institutions primarily involved in lending are commercial banks, mutual savings banks, and credit unions, but not investment banks.

a. True

b. False

3. Initial public offerings usually involve the firm selling shares to the general investing public.

a. True

b. False

4. Which type of bond would provide a high degree of price stability, because the bonds are not very sensitive to changing interest rates?

Discount

Short-term

Long-term

Speculative

registered