Question 1

The likelihood that borrowers are ill and would not be able to make interest and principal payments is an example of

Accepted Answer

A)  interest rate risk. 
B)  credit risk. 
C)  liquidity risk. 
D)  capital adequacy risk. 
A)  interest rate risk. 
B)  credit risk. 
C)  liquidity risk. 
D)  capital adequacy risk.

Question 2

What is the primary sources of funds for investment companies?

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

Question 3

A mortgage is a loan backed by real property in the form of buildings and houses.

Accepted Answer

A) True 
 B)False

Question 4

The National Banking Act of 1864

Accepted Answer

A)  established maximum capital requirements for federally chartered banks. 
B)  regulated loans with respect to safety and liquidity. 
C)  did not regulate reserves. 
D)  allowed national banks to open across state lines. 
A)  established maximum capital requirements for federally chartered banks. 
B)  regulated loans with respect to safety and liquidity. 
C)  did not regulate reserves. 
D)  allowed national banks to open across state lines.

Question 5

Financial institutions include all of the following except

Accepted Answer

A)  banks. 
B)  pension funds. 
C)  insurance companies. 
D)  pawn shops. 
A)  banks. 
B)  pension funds. 
C)  insurance companies. 
D)  pawn shops.

Question 6

Investment banks accept deposits and makes loans to individuals and businesses.

Accepted Answer

A) True 
 B)False

Question 7

Percent annual rate on a discount loan.

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 8

During the colonial period, small unincorporated banks issued their own paper money.

Accepted Answer

A) True 
 B)False

Question 9

A bank's common equity capital ratio is calculated as common equity divided by total assets all times 12.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

The Garn-St. Germain Depository Institutions Act, among other things

Accepted Answer

A)  extended the FED's control to thrift institutions and to commercial banks that are not members of the Fed. 
B)  enabled depository institutions to issue money market accounts with no regulated interest rate ceiling. 
C)  was designed to assist the investment banking industry. 
D)  allowed commercial banks to lend to each other. 
A)  extended the FED's control to thrift institutions and to commercial banks that are not members of the Fed. 
B)  enabled depository institutions to issue money market accounts with no regulated interest rate ceiling. 
C)  was designed to assist the investment banking industry. 
D)  allowed commercial banks to lend to each other.

Question 12

Tier 1 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 13

_______________ accept the savings of individuals and lend pooled savings to individuals primarily in the form of mortgage loans and operate almost entirely in New England , New York, and New Jersey, with most of their assets continuing to be invested in mortgage loans.

Accepted Answer

A)  Commercial banks 
B)  Thrift institutions 
C)  Savings banks 
D)  Credit unions 
A)  Commercial banks 
B)  Thrift institutions 
C)  Savings banks 
D)  Credit unions

Question 14

An investment bank accepts deposits, makes loans, and issues checking accounts.

Accepted Answer

A) True 
 B)False

Question 15

_______________ are for profit organizations that exist primarily to provide customers with consumer credit, including the financing of automobiles and the purchase of durable goods.

Accepted Answer

A)  Commercial banks 
B)  Sales finance companies 
C)  Savings banks 
D)  Brokerage firms 
A)  Commercial banks 
B)  Sales finance companies 
C)  Savings banks 
D)  Brokerage firms

Question 16

What is the primary sources of funds for mortgage banking firms?

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

Question 17

Today, reserve requirements imposed by the Federal Reserve apply only to member banks.

Accepted Answer

A) True 
 B)False

Question 18

A corporate bank is a bank that engages in both commercial banking and investment banking activities.

Accepted Answer

A) True 
 B)False

Question 19

Statewide branch banking

Accepted Answer

A)  is prohibited in all 50 states. 
B)  means that branch systems are less likely to fail than independent systems. 
C)  permits banks to located within a geographically defined distance of the main office. 
D)  is allowed in only 7 states. 
A)  is prohibited in all 50 states. 
B)  means that branch systems are less likely to fail than independent systems. 
C)  permits banks to located within a geographically defined distance of the main office. 
D)  is allowed in only 7 states.

Question 20

Another name for an open-end investment company is a

Accepted Answer

A)  brokerage firm. 
B)  finance company. 
C)  mutual fund. 
D)  investment bank. 
A)  brokerage firm. 
B)  finance company. 
C)  mutual fund. 
D)  investment bank.

The likelihood that borrowers are ill and would not be able to make interest and principal payments is an example of

What is the primary sources of funds for investment companies?

A mortgage is a loan backed by real property in the form of buildings and houses.

The National Banking Act of 1864

Financial institutions include all of the following except

Investment banks accept deposits and makes loans to individuals and businesses.

Percent annual rate on a discount loan.

During the colonial period, small unincorporated banks issued their own paper money.

A bank's common equity capital ratio is calculated as common equity divided by total assets all times 12.

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

The Garn-St. Germain Depository Institutions Act, among other things

Tier 1 ratio.

_______________ accept the savings of individuals and lend pooled savings to individuals primarily in the form of mortgage loans and operate almost entirely in New England , New York, and New Jersey, with most of their assets continuing to be invested in mortgage loans.

An investment bank accepts deposits, makes loans, and issues checking accounts.

_______________ are for profit organizations that exist primarily to provide customers with consumer credit, including the financing of automobiles and the purchase of durable goods.

What is the primary sources of funds for mortgage banking firms?

Today, reserve requirements imposed by the Federal Reserve apply only to member banks.

A corporate bank is a bank that engages in both commercial banking and investment banking activities.

Statewide branch banking

Another name for an open-end investment company is a

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

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Exam 3: Banks and Other Financial Institutions

The likelihood that borrowers are ill and would not be able to make interest and principal payments is an example of

What is the primary sources of funds for investment companies?

A mortgage is a loan backed by real property in the form of buildings and houses.

The National Banking Act of 1864

Financial institutions include all of the following except

Investment banks accept deposits and makes loans to individuals and businesses.

Percent annual rate on a discount loan.

During the colonial period, small unincorporated banks issued their own paper money.

A bank's common equity capital ratio is calculated as common equity divided by total assets all times 12.

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

The Garn-St. Germain Depository Institutions Act, among other things

Tier 1 ratio.

_______________ accept the savings of individuals and lend pooled savings to individuals primarily in the form of mortgage loans and operate almost entirely in New England , New York, and New Jersey, with most of their assets continuing to be invested in mortgage loans.

An investment bank accepts deposits, makes loans, and issues checking accounts.

_______________ are for profit organizations that exist primarily to provide customers with consumer credit, including the financing of automobiles and the purchase of durable goods.

What is the primary sources of funds for mortgage banking firms?

Today, reserve requirements imposed by the Federal Reserve apply only to member banks.

A corporate bank is a bank that engages in both commercial banking and investment banking activities.

Statewide branch banking

Another name for an open-end investment company is a

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