Question 1

Explain how selective credit controls can control stock market transactions.

Accepted Answer

The Fed can use selective credit control

Question 2

________ offer financial services to businesses,particularly in the area of international finance.

Accepted Answer

A)  Investment banks 
B)  Retail banks 
C)  Private banks 
D)  Credit unions 
E)  Merchant banks 
A)  Investment banks 
B)  Retail banks 
C)  Private banks 
D)  Credit unions 
E)  Merchant banks

Question 3

A security based on auto loans is not an example of an asset-backed security.

Accepted Answer

A) True 
 B)False

Question 4

Negative amortization occurs when the balance on your mortgage decreases over time.

Accepted Answer

A) True 
 B)False

Question 5

Compare and contrast federal funds rate and discount rate.

Accepted Answer

The federal funds rate is the rate that

Question 6

You have purchased your first home for $100,000,and the mortgage lender tells you that you will need a down payment of $15,000 because it will only lend you 85% of the purchase price.This percentage is known as the ________.

Accepted Answer

A)  mortgage-ownership ratio 
B)  loan-to-value 
C)  prime mortgage ratio 
D)  ownership criterion 
E)  mortgage-to-price 
A)  mortgage-ownership ratio 
B)  loan-to-value 
C)  prime mortgage ratio 
D)  ownership criterion 
E)  mortgage-to-price

Question 7

Banking institutions that offer deposit accounts and focus on offering home mortgage loans are known as ________.

Accepted Answer

A)  merchant banks 
B)  retail banks 
C)  thrift banks 
D)  private banks 
E)  credit unions 
A)  merchant banks 
B)  retail banks 
C)  thrift banks 
D)  private banks 
E)  credit unions

Question 8

________ banking refers to a range of banking services for high-net-worth individuals and families,such as managing real estate and other investments.

Accepted Answer

A)  Investment 
B)  Retail 
C)  Thrift 
D)  Private 
E)  Merchant 
A)  Investment 
B)  Retail 
C)  Thrift 
D)  Private 
E)  Merchant

Question 9

A mortgage loan that has a variable interest rate over the life of the loan is known as a(n)________ mortgage.

Accepted Answer

A)  adjustable term 
B)  secondary 
C)  subprime 
D)  prime 
E)  adjustable rate 
A)  adjustable term 
B)  secondary 
C)  subprime 
D)  prime 
E)  adjustable rate

Question 10

Credit freeze is a situation in which the federal government bans the issue of new loans.

Accepted Answer

A) True 
 B)False

Question 11

Finance companies are non-bank institutions that lend money to consumers and businesses for a wide variety of purposes.

Accepted Answer

A) True 
 B)False

Question 12

If the Fed decreases the reserve requirement,banks will have less money to lend.

Accepted Answer

A) True 
 B)False

Question 13

________ is the government-sponsored enterprise responsible for guaranteeing and funding home mortgages.

Accepted Answer

A)  The secondary mortgage market 
B)  Freddie Mac 
C)  Fannie Mae 
D)  The NYSE 
E)  The Federal Deposit Insurance Corporation 
A)  The secondary mortgage market 
B)  Freddie Mac 
C)  Fannie Mae 
D)  The NYSE 
E)  The Federal Deposit Insurance Corporation

Question 14

Which of the following is an example of an open market operation?

Accepted Answer

A)  Fed reducing the discount rate for banks 
B)  Fed imposing selective credit controls 
C)  Fed buying Treasury bonds 
D)  Fed increasing the discount rate for banks 
E)  Fed increasing the reserve requirement on deposits 
A)  Fed reducing the discount rate for banks 
B)  Fed imposing selective credit controls 
C)  Fed buying Treasury bonds 
D)  Fed increasing the discount rate for banks 
E)  Fed increasing the reserve requirement on deposits

Question 15

________ are non-bank institutions that lend money to consumers and businesses for such purposes as cars,home improvements,and purchases.

Accepted Answer

A)  Finance companies 
B)  Mortgage brokers 
C)  Thrifts 
D)  Credit unions 
E)  Loan associations 
A)  Finance companies 
B)  Mortgage brokers 
C)  Thrifts 
D)  Credit unions 
E)  Loan associations

Question 16

Which of the following is an example of an asset-backed security?

Accepted Answer

A)  a debenture issued by a reputed U.S. corporation 
B)  a derivative based on auto loans 
C)  a home loan issued by a bank 
D)  equity share of a U.S. company 
E)  a preference share issued by a U.S corporation 
A)  a debenture issued by a reputed U.S. corporation 
B)  a derivative based on auto loans 
C)  a home loan issued by a bank 
D)  equity share of a U.S. company 
E)  a preference share issued by a U.S corporation

Question 17

________ are non-bank companies that initiate loans on behalf of a mortgage lender in exchange for a fee.

Accepted Answer

A)  Mortgage brokers 
B)  Credit unions 
C)  Thrifts 
D)  Loan associations 
E)  Independent mortgage companies 
A)  Mortgage brokers 
B)  Credit unions 
C)  Thrifts 
D)  Loan associations 
E)  Independent mortgage companies

Question 18

What is a bubble?

Accepted Answer

A bubble is a market situation

Question 19

Money serves as a ________ when it is used as a way of accumulating wealth until it is needed.

Accepted Answer

A)  unit of accounting 
B)  means of payment 
C)  store of value 
D)  medium of exchange 
E)  standard of deferred payment 
A)  unit of accounting 
B)  means of payment 
C)  store of value 
D)  medium of exchange 
E)  standard of deferred payment

Question 20

________ is a situation in which borrowers stop making payments on a loan.

Accepted Answer

A)  Liquidity crisis 
B)  Bubble 
C)  Foreclosure 
D)  Default 
E)  Securitization 
A)  Liquidity crisis 
B)  Bubble 
C)  Foreclosure 
D)  Default 
E)  Securitization

Explain how selective credit controls can control stock market transactions.

________ offer financial services to businesses,particularly in the area of international finance.

A security based on auto loans is not an example of an asset-backed security.

Negative amortization occurs when the balance on your mortgage decreases over time.

Compare and contrast federal funds rate and discount rate.

You have purchased your first home for $100,000,and the mortgage lender tells you that you will need a down payment of $15,000 because it will only lend you 85% of the purchase price.This percentage is known as the ________.

Banking institutions that offer deposit accounts and focus on offering home mortgage loans are known as ________.

________ banking refers to a range of banking services for high-net-worth individuals and families,such as managing real estate and other investments.

A mortgage loan that has a variable interest rate over the life of the loan is known as a(n)________ mortgage.

Credit freeze is a situation in which the federal government bans the issue of new loans.

Finance companies are non-bank institutions that lend money to consumers and businesses for a wide variety of purposes.

If the Fed decreases the reserve requirement,banks will have less money to lend.

________ is the government-sponsored enterprise responsible for guaranteeing and funding home mortgages.

Which of the following is an example of an open market operation?

________ are non-bank institutions that lend money to consumers and businesses for such purposes as cars,home improvements,and purchases.

Which of the following is an example of an asset-backed security?

________ are non-bank companies that initiate loans on behalf of a mortgage lender in exchange for a fee.

What is a bubble?

Money serves as a ________ when it is used as a way of accumulating wealth until it is needed.

________ is a situation in which borrowers stop making payments on a loan.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

Filters

Exam 20: The Money Supply and Banking Systems

Explain how selective credit controls can control stock market transactions.

________ offer financial services to businesses,particularly in the area of international finance.

A security based on auto loans is not an example of an asset-backed security.

Negative amortization occurs when the balance on your mortgage decreases over time.

Compare and contrast federal funds rate and discount rate.

You have purchased your first home for $100,000,and the mortgage lender tells you that you will need a down payment of $15,000 because it will only lend you 85% of the purchase price.This percentage is known as the ________.

Banking institutions that offer deposit accounts and focus on offering home mortgage loans are known as ________.

________ banking refers to a range of banking services for high-net-worth individuals and families,such as managing real estate and other investments.

A mortgage loan that has a variable interest rate over the life of the loan is known as a(n)________ mortgage.

Credit freeze is a situation in which the federal government bans the issue of new loans.

Finance companies are non-bank institutions that lend money to consumers and businesses for a wide variety of purposes.

If the Fed decreases the reserve requirement,banks will have less money to lend.

________ is the government-sponsored enterprise responsible for guaranteeing and funding home mortgages.

Which of the following is an example of an open market operation?

________ are non-bank institutions that lend money to consumers and businesses for such purposes as cars,home improvements,and purchases.

Which of the following is an example of an asset-backed security?

________ are non-bank companies that initiate loans on behalf of a mortgage lender in exchange for a fee.

What is a bubble?

Money serves as a ________ when it is used as a way of accumulating wealth until it is needed.

________ is a situation in which borrowers stop making payments on a loan.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

Filters