Question 1

Thrift banks offer a variety of services related to initial public stock offerings and mergers and acquisitions.

Accepted Answer

A) True 
 B)False

Question 2

A(n)________ is a licensed professional who is hired to give an independent assessment of a home's value.

Accepted Answer

A)  value analyst 
B)  appraiser 
C)  broker 
D)  thrift 
E)  loan agent 
A)  value analyst 
B)  appraiser 
C)  broker 
D)  thrift 
E)  loan agent

Question 3

Money is anything generally accepted as a means of paying for goods and services.

Accepted Answer

A) True 
 B)False

Question 4

The prime rate is the interest rate that a bank charges its most credit-worthy customers.

Accepted Answer

A) True 
 B)False

Question 5

Labex Chemicals has invented a new vaccine for pneumonia in children.The vaccine is hyped to bring in huge profits for the firm.Because of this hype,the market value of Labex's shares increase by 300 percent.Many experts believe that this appreciation is much more than the likely benefits that the shareholders will receive.This situation exemplifies a(n)________.

Accepted Answer

A)  liquidity crisis 
B)  bubble 
C)  payment shock 
D)  asset crisis 
E)  credit freeze 
A)  liquidity crisis 
B)  bubble 
C)  payment shock 
D)  asset crisis 
E)  credit freeze

Question 6

Non-bank companies that use their own funds to offer mortgages are known as mortgage brokers.

Accepted Answer

A) True 
 B)False

Question 7

Prime mortgages refer to home loans that ________.

Accepted Answer

A)  offer loan-to-value as high as 125 percent 
B)  require high levels of documentation 
C)  are offered at a very high interest rate 
D)  lead to negative amortization 
E)  are offered to the most creditworthy customers 
A)  offer loan-to-value as high as 125 percent 
B)  require high levels of documentation 
C)  are offered at a very high interest rate 
D)  lead to negative amortization 
E)  are offered to the most creditworthy customers

Question 8

DBS bank has formed a special department to attract investments from wealthy individuals.The new department aims to obtain accounts that maintain a minimum balance of $20,000 or more.It also aims to offer premium credit cards and asset management services to such individuals.This is an example of ________.

Accepted Answer

A)  investment banking 
B)  retail banking 
C)  thrift banking 
D)  merchant banking 
E)  private banking 
A)  investment banking 
B)  retail banking 
C)  thrift banking 
D)  merchant banking 
E)  private banking

Question 9

Discount rate is the interest rate that member banks charge each other to borrow money overnight from the funds they keep in the Federal Reserve accounts.

Accepted Answer

A) True 
 B)False

Question 10

Subprime mortgages can help the poor build their own houses.Critically analyze this statement.

Accepted Answer

Subprime mortgages are home loans for bo

Question 11

Both Fannie Mae and Freddie Mac participate in the secondary mortgage market by purchasing loans originated by banks and other lenders.

Accepted Answer

A) True 
 B)False

Question 12

Foreclosures are situations in which lenders take possession of homes after borrowers default on their mortgage payments.

Accepted Answer

A) True 
 B)False

Question 13

The ________ rate is the interest rate that Federal Reserve member banks charge each other to borrow money from the funds they keep in the Federal Reserve accounts.

Accepted Answer

A)  federal reserve 
B)  discount 
C)  prime member 
D)  federal funds 
E)  federal leaves rate 
A)  federal reserve 
B)  discount 
C)  prime member 
D)  federal funds 
E)  federal leaves rate

Question 14

________ refers to a situation in which a lender takes possession of the collateralized home after the borrower defaults on his or her mortgage payments.

Accepted Answer

A)  Liquidity crisis 
B)  Foreclosure 
C)  Securitization 
D)  Credit freeze 
E)  Negative amortization 
A)  Liquidity crisis 
B)  Foreclosure 
C)  Securitization 
D)  Credit freeze 
E)  Negative amortization

Question 15

What are foreclosures? When do such situations occur?

Accepted Answer

Situations in which lenders take possess

Question 16

Federal funds rate is the interest rate that member banks pay when they borrow funds from the Fed.

Accepted Answer

A) True 
 B)False

Question 17

In an adjustable rate mortgage,________.

Accepted Answer

A)  collateral is not accepted as security 
B)  initial interest rates are very high 
C)  amortization is always positive 
D)  borrowers will have a low credit rating 
E)  people can buy more house than they can afford 
A)  collateral is not accepted as security 
B)  initial interest rates are very high 
C)  amortization is always positive 
D)  borrowers will have a low credit rating 
E)  people can buy more house than they can afford

Question 18

Independent mortgage companies are non-bank companies that ________.

Accepted Answer

A)  initiate loans on behalf of an investment bank 
B)  use their own funds to offer mortgages 
C)  use pooled funds to offer mortgages 
D)  initiate loans on behalf of a mortgage lender 
E)  offer opinions about the creditworthiness of borrowers 
A)  initiate loans on behalf of an investment bank 
B)  use their own funds to offer mortgages 
C)  use pooled funds to offer mortgages 
D)  initiate loans on behalf of a mortgage lender 
E)  offer opinions about the creditworthiness of borrowers

Question 19

During a liquidity crisis,companies can't get enough cash to meet their operating needs.

Accepted Answer

A) True 
 B)False

Question 20

Savings and loan associations are not-for-profit,member-owned cooperatives that focus on offering home mortgage loans.

Accepted Answer

A) True 
 B)False

Thrift banks offer a variety of services related to initial public stock offerings and mergers and acquisitions.

A(n)________ is a licensed professional who is hired to give an independent assessment of a home's value.

Money is anything generally accepted as a means of paying for goods and services.

The prime rate is the interest rate that a bank charges its most credit-worthy customers.

Non-bank companies that use their own funds to offer mortgages are known as mortgage brokers.

Prime mortgages refer to home loans that ________.

Discount rate is the interest rate that member banks charge each other to borrow money overnight from the funds they keep in the Federal Reserve accounts.

Subprime mortgages can help the poor build their own houses.Critically analyze this statement.

Both Fannie Mae and Freddie Mac participate in the secondary mortgage market by purchasing loans originated by banks and other lenders.

Foreclosures are situations in which lenders take possession of homes after borrowers default on their mortgage payments.

The ________ rate is the interest rate that Federal Reserve member banks charge each other to borrow money from the funds they keep in the Federal Reserve accounts.

________ refers to a situation in which a lender takes possession of the collateralized home after the borrower defaults on his or her mortgage payments.

What are foreclosures? When do such situations occur?

Federal funds rate is the interest rate that member banks pay when they borrow funds from the Fed.

In an adjustable rate mortgage,________.

Independent mortgage companies are non-bank companies that ________.

During a liquidity crisis,companies can't get enough cash to meet their operating needs.

Savings and loan associations are not-for-profit,member-owned cooperatives that focus on offering home mortgage loans.

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

Thrift banks offer a variety of services related to initial public stock offerings and mergers and acquisitions.

A(n)________ is a licensed professional who is hired to give an independent assessment of a home's value.

Money is anything generally accepted as a means of paying for goods and services.

The prime rate is the interest rate that a bank charges its most credit-worthy customers.

Non-bank companies that use their own funds to offer mortgages are known as mortgage brokers.

Prime mortgages refer to home loans that ________.

Discount rate is the interest rate that member banks charge each other to borrow money overnight from the funds they keep in the Federal Reserve accounts.

Subprime mortgages can help the poor build their own houses.Critically analyze this statement.

Both Fannie Mae and Freddie Mac participate in the secondary mortgage market by purchasing loans originated by banks and other lenders.

Foreclosures are situations in which lenders take possession of homes after borrowers default on their mortgage payments.

The ________ rate is the interest rate that Federal Reserve member banks charge each other to borrow money from the funds they keep in the Federal Reserve accounts.

________ refers to a situation in which a lender takes possession of the collateralized home after the borrower defaults on his or her mortgage payments.

What are foreclosures? When do such situations occur?

Federal funds rate is the interest rate that member banks pay when they borrow funds from the Fed.

In an adjustable rate mortgage,________.

Independent mortgage companies are non-bank companies that ________.

During a liquidity crisis,companies can't get enough cash to meet their operating needs.

Savings and loan associations are not-for-profit,member-owned cooperatives that focus on offering home mortgage loans.

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