Question 1

The Second Bank of the United States was the second federally chartered bank in the U.S.

Accepted Answer

A) True 
 B)False

Question 2

The Monetary Control Act prohibited the Federal Reserve from controlling thrift institutions.

Accepted Answer

A) True 
 B)False

Question 3

The Depository Institutions Deregulation and Monetary Control Act

Accepted Answer

A)  established a system of central 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)  established a system of central 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 4

Common equity capital ratio.

Accepted Answer

A)  Interest paid / Amount borrowed x 100 
B)  Discount amount / (Amount borrowed - Discount amount) x 100 
C)  Company equity / Total assets x 100 
D)  Tier 1 capital / Risk-adjusted assets x 100 
E)  Tier 1 + Tier 2 capital / Risk-adjusted assets x 100 
A)  Interest paid / Amount borrowed x 100 
B)  Discount amount / (Amount borrowed - Discount amount) x 100 
C)  Company equity / Total assets x 100 
D)  Tier 1 capital / Risk-adjusted assets x 100 
E)  Tier 1 + Tier 2 capital / Risk-adjusted assets x 100

Question 5

The U.S. banking system as it exists today is relatively unchanged since just before the Civil War.

Accepted Answer

A) True 
 B)False

Question 6

Legislation that permits depository institutions to compete with money market mutual funds on an equal basis with respect to interest rates offered to investors is the

Accepted Answer

A)  Garn-St. Germain Depository Institutions Act. 
B)  National Banking Act. 
C)  Hunt Commission legislation. 
D)  Depository Institutions Deregulation and Monetary Control Act. 
A)  Garn-St. Germain Depository Institutions Act. 
B)  National Banking Act. 
C)  Hunt Commission legislation. 
D)  Depository Institutions Deregulation and Monetary Control Act.

Question 7

Financial diversification is the process by which individual savings are accumulated in depository institutions and, in turn, lent or invested.

Accepted Answer

A) True 
 B)False

Question 8

Commercial banks obtain the bulk of their loanable funds from

Accepted Answer

A)  depositors. 
B)  the issue of certificates of deposit. 
C)  sale of bank stock. 
D)  sale of subordinated debenture bonds. 
A)  depositors. 
B)  the issue of certificates of deposit. 
C)  sale of bank stock. 
D)  sale of subordinated debenture bonds.

Question 9

Bank solvency reflects the ability to keep the value of a bank's assets greater than its liabilities.

Accepted Answer

A) True 
 B)False

Question 10

The adequacy of capital for commercial banks as measured by regulatory authorities is

Accepted Answer

A)  a composite of various asset risk categories. 
B)  a measure of investment success. 
C)  based on the total amount of deposits of a bank. 
D)  based on the ratio of federal government obligations to deposits. 
A)  a composite of various asset risk categories. 
B)  a measure of investment success. 
C)  based on the total amount of deposits of a bank. 
D)  based on the ratio of federal government obligations to deposits.

Question 11

Savings and loans were first known as building societies.

Accepted Answer

A) True 
 B)False

Question 12

The United States is a tri-banking system.

Accepted Answer

A) True 
 B)False

Question 13

__________________ accept savings from individuals and then lend these pooled savings to businesses, governments, and individuals.

Accepted Answer

A)  Insurance companies 
B)  Commercial finance companies 
C)  Government institutions 
D)  Investment banks 
E)  None of the above 
A)  Insurance companies 
B)  Commercial finance companies 
C)  Government institutions 
D)  Investment banks 
E)  None of the above

Question 14

The National Banking Act of 1864 made it possible for banks to receive federal charters.

Accepted Answer

A) True 
 B)False

Question 15

Legislation that provided for the separation of commercial banking and investment banking activities in the United States is called

Accepted Answer

A)  Garn-St. Germain Depository Institutions Act. 
B)  Glass-Steagall Act. 
C)  Hunt Commission legislation. 
D)  Depository Institutions Deregulation and Monetary Control Act. 
A)  Garn-St. Germain Depository Institutions Act. 
B)  Glass-Steagall Act. 
C)  Hunt Commission legislation. 
D)  Depository Institutions Deregulation and Monetary Control Act.

Question 16

Total capital ratio.

Accepted Answer

A)  Interest paid / Amount borrowed x 100 
B)  Discount amount / (Amount borrowed - Discount amount) x 100 
C)  Company equity / Total assets x 100 
D)  Tier 1 capital / Risk-adjusted assets x 100 
E)  Tier 1 + Tier 2 capital / Risk-adjusted assets x 100 
A)  Interest paid / Amount borrowed x 100 
B)  Discount amount / (Amount borrowed - Discount amount) x 100 
C)  Company equity / Total assets x 100 
D)  Tier 1 capital / Risk-adjusted assets x 100 
E)  Tier 1 + Tier 2 capital / Risk-adjusted assets x 100

Question 17

Insurance companies sell shares in their firms to individuals and invest the pooled proceeds in corporate and government securities.

Accepted Answer

A) True 
 B)False

Question 18

For a standard loan, the percent annual rate is calculated as the interest paid divided by the amount borrowed all times 365.

Accepted Answer

A) True 
 B)False

Question 19

Branch banks are those banking offices that are controlled by a single parent bank.

Accepted Answer

A) True 
 B)False

Question 20

In the U.S., housing prices peaked in 2008 and home values then began a sharp decline leading to the 2008 financial crisis.

Accepted Answer

A) True 
 B)False

The Second Bank of the United States was the second federally chartered bank in the U.S.

The Monetary Control Act prohibited the Federal Reserve from controlling thrift institutions.

The Depository Institutions Deregulation and Monetary Control Act

Common equity capital ratio.

The U.S. banking system as it exists today is relatively unchanged since just before the Civil War.

Legislation that permits depository institutions to compete with money market mutual funds on an equal basis with respect to interest rates offered to investors is the

Financial diversification is the process by which individual savings are accumulated in depository institutions and, in turn, lent or invested.

Commercial banks obtain the bulk of their loanable funds from

Bank solvency reflects the ability to keep the value of a bank's assets greater than its liabilities.

The adequacy of capital for commercial banks as measured by regulatory authorities is

Savings and loans were first known as building societies.

The United States is a tri-banking system.

__________________ accept savings from individuals and then lend these pooled savings to businesses, governments, and individuals.

The National Banking Act of 1864 made it possible for banks to receive federal charters.

Legislation that provided for the separation of commercial banking and investment banking activities in the United States is called

Total capital ratio.

Insurance companies sell shares in their firms to individuals and invest the pooled proceeds in corporate and government securities.

For a standard loan, the percent annual rate is calculated as the interest paid divided by the amount borrowed all times 365.

Branch banks are those banking offices that are controlled by a single parent bank.

In the U.S., housing prices peaked in 2008 and home values then began a sharp decline leading to the 2008 financial crisis.

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 Second Bank of the United States was the second federally chartered bank in the U.S.

The Monetary Control Act prohibited the Federal Reserve from controlling thrift institutions.

The Depository Institutions Deregulation and Monetary Control Act

Common equity capital ratio.

The U.S. banking system as it exists today is relatively unchanged since just before the Civil War.

Legislation that permits depository institutions to compete with money market mutual funds on an equal basis with respect to interest rates offered to investors is the

Financial diversification is the process by which individual savings are accumulated in depository institutions and, in turn, lent or invested.

Commercial banks obtain the bulk of their loanable funds from

Bank solvency reflects the ability to keep the value of a bank's assets greater than its liabilities.

The adequacy of capital for commercial banks as measured by regulatory authorities is

Savings and loans were first known as building societies.

The United States is a tri-banking system.

__________________ accept savings from individuals and then lend these pooled savings to businesses, governments, and individuals.

The National Banking Act of 1864 made it possible for banks to receive federal charters.

Legislation that provided for the separation of commercial banking and investment banking activities in the United States is called

Total capital ratio.

Insurance companies sell shares in their firms to individuals and invest the pooled proceeds in corporate and government securities.

For a standard loan, the percent annual rate is calculated as the interest paid divided by the amount borrowed all times 365.

Branch banks are those banking offices that are controlled by a single parent bank.

In the U.S., housing prices peaked in 2008 and home values then began a sharp decline leading to the 2008 financial crisis.

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