Question 1

In 1977,he pioneered the concept of selling new public issues of junk bonds for companies that had not yet achieved investment-grade status.

Accepted Answer

A) Michael Milken 
B) Roger Milliken 
C) Ivan Boskey 
D) Carl Ichan 
A) Michael Milken 
B) Roger Milliken 
C) Ivan Boskey 
D) Carl Ichan

Question 2

Like the dual banking system for commercial banks,thrifts can have either ________ or ________ charters.

Accepted Answer

A) state; federal 
B) state; local 
C) local; federal 
D) municipal; federal 
A) state; federal 
B) state; local 
C) local; federal 
D) municipal; federal

Question 3

If a foreign bank operates a subsidiary bank in the U.S.,the subsidiary bank is

Accepted Answer

A) subject to the same regulations as a U.S.owned bank. 
B) only subject to the regulations of the country in which the foreign bank is chartered. 
C) restricted to making loans to only foreign citizens in the U.S. 
D) restricted to accepting deposits from foreign citizens living in the U.S. 
A) subject to the same regulations as a U.S.owned bank. 
B) only subject to the regulations of the country in which the foreign bank is chartered. 
C) restricted to making loans to only foreign citizens in the U.S. 
D) restricted to accepting deposits from foreign citizens living in the U.S.

Question 4

The legislation that separated investment banking from commercial banking until its repeal in 1999 is known as the

Accepted Answer

A) National Bank Act of 1863. 
B) Federal Reserve Act of 1913. 
C) Glass-Steagall Act. 
D) McFadden Act. 
A) National Bank Act of 1863. 
B) Federal Reserve Act of 1913. 
C) Glass-Steagall Act. 
D) McFadden Act.

Question 5

Allowing bank branching across state lines gives banks greater ability to coordinate bank operations.This makes it easier for them to receive the benefits of

Accepted Answer

A) the dual banking system. 
B) economies of scale. 
C) disintermediation. 
D) interest-rate irregularities. 
A) the dual banking system. 
B) economies of scale. 
C) disintermediation. 
D) interest-rate irregularities.

Question 6

Today the United States has a dual banking system in which banks supervised by the ________ and by the ________ operate side by side.

Accepted Answer

A) federal government; municipalities 
B) state governments; municipalities 
C) federal government; states 
D) municipalities; states 
A) federal government; municipalities 
B) state governments; municipalities 
C) federal government; states 
D) municipalities; states

Question 7

Credit cards date back to

Accepted Answer

A) prior to the second World War. 
B) just after the second World War. 
C) the early 1950s. 
D) the late 1950s. 
A) prior to the second World War. 
B) just after the second World War. 
C) the early 1950s. 
D) the late 1950s.

Question 8

Since the passage of the International Banking Act of 1978,the competitive advantage enjoyed by foreign banks in the U.S.has been

Accepted Answer

A) reduced. 
B) mildly expanded. 
C) completely eliminated. 
D) greatly expanded. 
A) reduced. 
B) mildly expanded. 
C) completely eliminated. 
D) greatly expanded.

Question 9

In September 2008,the Reserve Primary Fund,a money market mutual fund,found itself in the situation know as "breaking the buck." This means that

Accepted Answer

A) they could no longer afford to redeem shares at the par value of $1. 
B) they required shareholders to contribute a dollar more in fees each month. 
C) shareholders were able to redeem shares for more than a $1. 
D) shares earned more than a dollar in interest. 
A) they could no longer afford to redeem shares at the par value of $1. 
B) they required shareholders to contribute a dollar more in fees each month. 
C) shareholders were able to redeem shares for more than a $1. 
D) shares earned more than a dollar in interest.

Question 10

Thrift institutions importance as a source of funds for borrowers

Accepted Answer

A) has shrunk from around 40 percent of total credit advanced in the late 1970s to below 30 percent by 2011. 
B) has shrunk from over 20 percent of total credit advanced in the late 1970s to around 3 percent by 2011. 
C) has expanded dramatically,from around 15 percent of total credit advanced in the late 1970s to above 25 percent by 2011. 
D) has expanded dramatically,from around 15 percent of total credit advanced in the late 1970s to above 30 percent by 2011. 
A) has shrunk from around 40 percent of total credit advanced in the late 1970s to below 30 percent by 2011. 
B) has shrunk from over 20 percent of total credit advanced in the late 1970s to around 3 percent by 2011. 
C) has expanded dramatically,from around 15 percent of total credit advanced in the late 1970s to above 25 percent by 2011. 
D) has expanded dramatically,from around 15 percent of total credit advanced in the late 1970s to above 30 percent by 2011.

Question 11

Which of the following is a true statement concerning bank holding companies?

Accepted Answer

A) Bank holding companies own few large banks. 
B) Bank holding companies have experienced dramatic growth in the past three decades. 
C) The McFadden Act has prevented bank holding companies from establishing branch banks. 
D) Bank holding companies can own only banks. 
A) Bank holding companies own few large banks. 
B) Bank holding companies have experienced dramatic growth in the past three decades. 
C) The McFadden Act has prevented bank holding companies from establishing branch banks. 
D) Bank holding companies can own only banks.

Question 12

Loophole mining refers to financial innovation designed to

Accepted Answer

A) hide transactions from the IRS. 
B) conceal transactions from the SEC. 
C) get around regulations. 
D) conceal transactions from the Treasury Department. 
A) hide transactions from the IRS. 
B) conceal transactions from the SEC. 
C) get around regulations. 
D) conceal transactions from the Treasury Department.

Question 13

Sweep accounts which were created to avoid reserve requirements became possible because of a change in

Accepted Answer

A) deposit ceilings. 
B) technology. 
C) government rules. 
D) bank mergers. 
A) deposit ceilings. 
B) technology. 
C) government rules. 
D) bank mergers.

Question 14

The entry of AT&T and GM into the credit card business is an indication of

Accepted Answer

A) government's efforts to deregulate the provision of financial services. 
B) the rising profitability of credit card operations. 
C) the reduction in costs of credit card operations since 1990. 
D) the sale of unprofitable operations by Bank of America and Citicorp. 
A) government's efforts to deregulate the provision of financial services. 
B) the rising profitability of credit card operations. 
C) the reduction in costs of credit card operations since 1990. 
D) the sale of unprofitable operations by Bank of America and Citicorp.

Question 15

________ are the only depository institutions that are tax-exempt.

Accepted Answer

A) Commercial banks 
B) Savings and loans 
C) Mutual savings banks 
D) Credit unions 
A) Commercial banks 
B) Savings and loans 
C) Mutual savings banks 
D) Credit unions

Question 16

The spectacular growth in international banking can be explained by

Accepted Answer

A) the rapid growth in international trade. 
B) the 1988 Basel Agreement. 
C) the desire for U.S.banks to escape burdensome domestic regulations. 
D) the creation of the World Trade Organization. 
A) the rapid growth in international trade. 
B) the 1988 Basel Agreement. 
C) the desire for U.S.banks to escape burdensome domestic regulations. 
D) the creation of the World Trade Organization.

Question 17

With the creation of the Federal Deposit Insurance Corporation,member banks of the Federal Reserve System ________ to purchase FDIC insurance for their depositors,while non-member commercial banks ________ to buy deposit insurance.

Accepted Answer

A) could choose; were required 
B) could choose; were given the option 
C) were required,could choose 
D) were required; were required 
A) could choose; were required 
B) could choose; were given the option 
C) were required,could choose 
D) were required; were required

Question 18

The declining cost of computer technology has made ________ a reality.

Accepted Answer

A) brick and mortar banking 
B) commercial banking 
C) virtual banking 
D) investment banking 
A) brick and mortar banking 
B) commercial banking 
C) virtual banking 
D) investment banking

Question 19

Mutual savings banks are owned by

Accepted Answer

A) shareholders. 
B) partners. 
C) depositors. 
D) foreign investors. 
A) shareholders. 
B) partners. 
C) depositors. 
D) foreign investors.

Question 20

Adjustable rate mortgages

Accepted Answer

A) protect households against higher mortgage payments when interest rates rise. 
B) keep financial institutions' earnings high even when interest rates are falling. 
C) benefit homeowners when interest rates are falling. 
D) generally have higher initial interest rates than on conventional fixed-rate mortgages. 
A) protect households against higher mortgage payments when interest rates rise. 
B) keep financial institutions' earnings high even when interest rates are falling. 
C) benefit homeowners when interest rates are falling. 
D) generally have higher initial interest rates than on conventional fixed-rate mortgages.

Exam 12: Banking Industry: Structure and Competition

In 1977,he pioneered the concept of selling new public issues of junk bonds for companies that had not yet achieved investment-grade status.

Like the dual banking system for commercial banks,thrifts can have either ________ or ________ charters.

If a foreign bank operates a subsidiary bank in the U.S.,the subsidiary bank is

The legislation that separated investment banking from commercial banking until its repeal in 1999 is known as the

Allowing bank branching across state lines gives banks greater ability to coordinate bank operations.This makes it easier for them to receive the benefits of

Today the United States has a dual banking system in which banks supervised by the ________ and by the ________ operate side by side.

Credit cards date back to

Since the passage of the International Banking Act of 1978,the competitive advantage enjoyed by foreign banks in the U.S.has been

In September 2008,the Reserve Primary Fund,a money market mutual fund,found itself in the situation know as "breaking the buck." This means that

Thrift institutions importance as a source of funds for borrowers

Which of the following is a true statement concerning bank holding companies?

Loophole mining refers to financial innovation designed to

Sweep accounts which were created to avoid reserve requirements became possible because of a change in

The entry of AT&T and GM into the credit card business is an indication of

________ are the only depository institutions that are tax-exempt.

The spectacular growth in international banking can be explained by

With the creation of the Federal Deposit Insurance Corporation,member banks of the Federal Reserve System ________ to purchase FDIC insurance for their depositors,while non-member commercial banks ________ to buy deposit insurance.

The declining cost of computer technology has made ________ a reality.

Mutual savings banks are owned by

Adjustable rate mortgages

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

What Is Money

Understanding Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory,inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

The ISLM Model

Filters

Like the dual banking system for commercial banks,thrifts can have either or charters.

Today the United States has a dual banking system in which banks supervised by the and by the operate side by side.

With the creation of the Federal Deposit Insurance Corporation,member banks of the Federal Reserve System to purchase FDIC insurance for their depositors,while non-member commercial banks to buy deposit insurance.