Question 1

The total capital ratio can be computed as total capital divided by total assets times 100.

Accepted Answer

A) True 
 B)False

Question 2

Investment banking firms assist individuals to purchase new or existing securities issues or to sell previously purchased securities.

Accepted Answer

A) True 
 B)False

Question 3

The principal liabilities of all depository institutions are

Accepted Answer

A)  reserves. 
B)  deposits. 
C)  loans. 
D)  securities. 
A)  reserves. 
B)  deposits. 
C)  loans. 
D)  securities.

Question 4

An organization that received contributions from employees and/or their employers and invests the proceeds on behalf of the employees for use during their retirement years is called a(n)

Accepted Answer

A)  mutual fund. 
B)  savings bank. 
C)  pension fund. 
D)  retirement fund. 
A)  mutual fund. 
B)  savings bank. 
C)  pension fund. 
D)  retirement fund.

Question 5

Credit unions are

Accepted Answer

A)  for profit organizations. 
B)  made up of individuals who possess common bonds of association. 
C)  institutions that derive funds from investment activities. 
D)  generally larger than most commercial banks. 
A)  for profit organizations. 
B)  made up of individuals who possess common bonds of association. 
C)  institutions that derive funds from investment activities. 
D)  generally larger than most commercial banks.

Question 6

An open-end investment company that can issue an unlimited number of its shares to investors and use the pooled proceeds to purchase corporate and government securities is called a(n)

Accepted Answer

A)  mutual fund. 
B)  pension fund. 
C)  insurance company. 
D)  brokerage firm. 
A)  mutual fund. 
B)  pension fund. 
C)  insurance company. 
D)  brokerage firm.

Question 7

Credit unions are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit.

Accepted Answer

A) True 
 B)False

Question 8

An unsecured loan represents a general claim against specific assets of the borrower.

Accepted Answer

A) True 
 B)False

Question 9

Savings banks have nearly three quarters of their assets in the form of

Accepted Answer

A)  securities. 
B)  cash. 
C)  unsecured loans. 
D)  real estate mortgages and mortgage-backed securities. 
A)  securities. 
B)  cash. 
C)  unsecured loans. 
D)  real estate mortgages and mortgage-backed securities.

Question 10

The Monetary Control Act

Accepted Answer

A)  extended the Fed's control to thrift institutions and non-member commercial banks. 
B)  has resulted in more competition among depository institutions. 
C)  increased federal deposit insurance from $40,000 to $80,000 for each account. 
D)  established minimum capital requirements for banks with federal charters. 
A)  extended the Fed's control to thrift institutions and non-member commercial banks. 
B)  has resulted in more competition among depository institutions. 
C)  increased federal deposit insurance from $40,000 to $80,000 for each account. 
D)  established minimum capital requirements for banks with federal charters.

Question 11

The item on the assets side of a bank's balance sheet that represents the largest proportion of bank assets is

Accepted Answer

A)  deposits. 
B)  owner's capital. 
C)  securities. 
D)  loans. 
A)  deposits. 
B)  owner's capital. 
C)  securities. 
D)  loans.

Question 12

In general, the effective rate of interest on a discount loan

Accepted Answer

A)  is lower than that on standard loan. 
B)  is higher than that on a standard loan. 
C)  is identical to that on a standard loan. 
D)  is unknown because it's not disclosed. 
A)  is lower than that on standard loan. 
B)  is higher than that on a standard loan. 
C)  is identical to that on a standard loan. 
D)  is unknown because it's not disclosed.

Question 13

_______________ provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes, whereas ______________ originate mortgage loans on homes and other real property by bringing together borrowers and institutional investors.

Accepted Answer

A)  thrift institutions; savings and loans 
B)  thrift institutions; mortgage banking firms 
C)  finance companies; savings and loans 
D)  finance companies; mortgage banking firms 
A)  thrift institutions; savings and loans 
B)  thrift institutions; mortgage banking firms 
C)  finance companies; savings and loans 
D)  finance companies; mortgage banking firms

Question 14

__________________ collect premiums on insurance policies and employee/employer contributions from pension fund participants and provide retirement benefits and insurance against major financial losses.

Accepted Answer

A)  Banks 
B)  Contractual savings institutions 
C)  Investment banking firms 
D)  Brokerage firms 
A)  Banks 
B)  Contractual savings institutions 
C)  Investment banking firms 
D)  Brokerage firms

Question 15

The Economic Stabilization Act of 2008 had a primary focus of allowing the U.S. Treasury to purchase up to $700 billion of "troubled" or "toxic" assets held by financial institutions.

Accepted Answer

A) True 
 B)False

Question 16

The Glass-Steagall Act was repealed with the passage of the Gramm-Leach-Bliley Act of 1999.

Accepted Answer

A) True 
 B)False

Question 17

__________________ are the two important forms of contractual savings organizations.

Accepted Answer

A)  Insurance companies and pension funds 
B)  banks and insurance companies 
C)  Investment banks and pension funds 
D)  Pension funds and brokerage firms 
A)  Insurance companies and pension funds 
B)  banks and insurance companies 
C)  Investment banks and pension funds 
D)  Pension funds and brokerage firms

Question 18

Our system of national banks

Accepted Answer

A)  was designed to destroy state banking. 
B)  was an integral part of the Federal Reserve Act. 
C)  was replaced by Federal Reserve banking. 
D)  came into existence during the Civil War. 
A)  was designed to destroy state banking. 
B)  was an integral part of the Federal Reserve Act. 
C)  was replaced by Federal Reserve banking. 
D)  came into existence during the Civil War.

Question 19

Insurance companies receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.

Accepted Answer

A) True 
 B)False

Question 20

What is the primary sources of funds for credit unions?

Accepted Answer

A)  Individual savings 
B)  Premiums paid on policies 
C)  Employee/employer contributions 
D)  Other financial institutions 
A)  Individual savings 
B)  Premiums paid on policies 
C)  Employee/employer contributions 
D)  Other financial institutions

The total capital ratio can be computed as total capital divided by total assets times 100.

Investment banking firms assist individuals to purchase new or existing securities issues or to sell previously purchased securities.

The principal liabilities of all depository institutions are

An organization that received contributions from employees and/or their employers and invests the proceeds on behalf of the employees for use during their retirement years is called a(n)

Credit unions are

An open-end investment company that can issue an unlimited number of its shares to investors and use the pooled proceeds to purchase corporate and government securities is called a(n)

Credit unions are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit.

An unsecured loan represents a general claim against specific assets of the borrower.

Savings banks have nearly three quarters of their assets in the form of

The Monetary Control Act

The item on the assets side of a bank's balance sheet that represents the largest proportion of bank assets is

In general, the effective rate of interest on a discount loan

_ provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes, whereas originate mortgage loans on homes and other real property by bringing together borrowers and institutional investors.

__________________ collect premiums on insurance policies and employee/employer contributions from pension fund participants and provide retirement benefits and insurance against major financial losses.

The Economic Stabilization Act of 2008 had a primary focus of allowing the U.S. Treasury to purchase up to $700 billion of "troubled" or "toxic" assets held by financial institutions.

The Glass-Steagall Act was repealed with the passage of the Gramm-Leach-Bliley Act of 1999.

__________________ are the two important forms of contractual savings organizations.

Our system of national banks

Insurance companies receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.

What is the primary sources of funds for credit unions?

The Financial Environment

Money and the Monetary System

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 3: Banks and Other Financial Institutions

The total capital ratio can be computed as total capital divided by total assets times 100.

Investment banking firms assist individuals to purchase new or existing securities issues or to sell previously purchased securities.

The principal liabilities of all depository institutions are

An organization that received contributions from employees and/or their employers and invests the proceeds on behalf of the employees for use during their retirement years is called a(n)

Credit unions are

An open-end investment company that can issue an unlimited number of its shares to investors and use the pooled proceeds to purchase corporate and government securities is called a(n)

Credit unions are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit.

An unsecured loan represents a general claim against specific assets of the borrower.

Savings banks have nearly three quarters of their assets in the form of

The Monetary Control Act

The item on the assets side of a bank's balance sheet that represents the largest proportion of bank assets is

In general, the effective rate of interest on a discount loan

_______________ provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes, whereas ______________ originate mortgage loans on homes and other real property by bringing together borrowers and institutional investors.

__________________ collect premiums on insurance policies and employee/employer contributions from pension fund participants and provide retirement benefits and insurance against major financial losses.

The Economic Stabilization Act of 2008 had a primary focus of allowing the U.S. Treasury to purchase up to $700 billion of "troubled" or "toxic" assets held by financial institutions.

The Glass-Steagall Act was repealed with the passage of the Gramm-Leach-Bliley Act of 1999.

__________________ are the two important forms of contractual savings organizations.

Our system of national banks

Insurance companies receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.

What is the primary sources of funds for credit unions?

The Financial Environment

Money and the Monetary System

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

_ provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes, whereas originate mortgage loans on homes and other real property by bringing together borrowers and institutional investors.