Question 1

Congress introduced deposit insurance in response to

Accepted Answer

A)  the savings-and-loan crisis of the 1980s. 
B)  the banking crisis of the 1930s. 
C)  the demise of the Second Bank of the United States in 1836. 
D)  the demise of the First Bank of the United States in 1811. 
A)  the savings-and-loan crisis of the 1980s. 
B)  the banking crisis of the 1930s. 
C)  the demise of the Second Bank of the United States in 1836. 
D)  the demise of the First Bank of the United States in 1811.

Question 2

The McFadden Act of 1927

Accepted Answer

A)  separated commercial banking from investment banking. 
B)  put a tax on the issuance of bank notes by state banks. 
C)  prohibited national banks from operating branches outside their home states. 
D)  established the Federal Reserve System. 
A)  separated commercial banking from investment banking. 
B)  put a tax on the issuance of bank notes by state banks. 
C)  prohibited national banks from operating branches outside their home states. 
D)  established the Federal Reserve System.

Question 3

What is an important difference between certificates of deposits (CDs)worth less than $100,000 compared to those worth $100,000 or more?

Accepted Answer

CDs of $100,000 or more are ne

Question 4

Short-term loans between banks are called

Accepted Answer

A)  federal funds. 
B)  repurchase agreements. 
C)  repos. 
D)  discount loans. 
A)  federal funds. 
B)  repurchase agreements. 
C)  repos. 
D)  discount loans.

Question 5

The sensitivity of bank capital to market interest rates is measured by

Accepted Answer

A)  gap analysis. 
B)  duration analysis. 
C)  leverage ratio. 
D)  capital analysis. 
A)  gap analysis. 
B)  duration analysis. 
C)  leverage ratio. 
D)  capital analysis.

Question 6

Small business loans are ________ to securitize than are mortgage loans and are ________ to securitize than are balances on credit cards.

Accepted Answer

A)  more difficult; more difficult 
B)  more difficult; easier 
C)  easier; more difficult 
D)  easier; easier 
A)  more difficult; more difficult 
B)  more difficult; easier 
C)  easier; more difficult 
D)  easier; easier

Question 7

The ratio of bank capital to bank assets is known as the bank's

Accepted Answer

A)  leverage ratio. 
B)  net interest margin. 
C)  return on equity. 
D)  return on capital. 
A)  leverage ratio. 
B)  net interest margin. 
C)  return on equity. 
D)  return on capital.

Question 8

Explicit provisions in a loan agreement that prohibit the borrower from engaging in certain activities is called

Accepted Answer

A)  credit rationing. 
B)  restrictive covenants. 
C)  credit-risk analysis. 
D)  adverse selection. 
A)  credit rationing. 
B)  restrictive covenants. 
C)  credit-risk analysis. 
D)  adverse selection.

Question 9

Which of the following is a hybrid of a checking and savings account?

Accepted Answer

A)  CD 
B)  negotiable CD 
C)  passbook account 
D)  money market deposit account 
A)  CD 
B)  negotiable CD 
C)  passbook account 
D)  money market deposit account

Question 10

As of 2016,the bank portion of TARP

Accepted Answer

A)  earned a profit of $30 billion. 
B)  earned a profit of $245 billion. 
C)  cost $266 billion. 
D)  cost $700 billion. 
A)  earned a profit of $30 billion. 
B)  earned a profit of $245 billion. 
C)  cost $266 billion. 
D)  cost $700 billion.

Question 11

Which of the following statements about checkable deposits is correct?

Accepted Answer

A)  Checkable deposits are a larger fraction of banks' funds today than in 1973. 
B)  Checkable deposits are a smaller fraction of banks' funds today than in 1973. 
C)  All checkable deposits pay interest. 
D)  No checkable deposits pay interest. 
A)  Checkable deposits are a larger fraction of banks' funds today than in 1973. 
B)  Checkable deposits are a smaller fraction of banks' funds today than in 1973. 
C)  All checkable deposits pay interest. 
D)  No checkable deposits pay interest.

Question 12

The ratio of a bank's after-tax profit to bank capital is known as

Accepted Answer

A)  net interest margin. 
B)  return on equity. 
C)  return on capital. 
D)  spread. 
A)  net interest margin. 
B)  return on equity. 
C)  return on capital. 
D)  spread.

Question 13

Federal funds are

Accepted Answer

A)  the tax revenues of the federal government. 
B)  loans by the Federal Reserve to banks. 
C)  loans by banks to the Federal Reserve. 
D)  short-term loans between banks. 
A)  the tax revenues of the federal government. 
B)  loans by the Federal Reserve to banks. 
C)  loans by banks to the Federal Reserve. 
D)  short-term loans between banks.

Question 14

A balance sheet

Accepted Answer

A)  is a statement showing an individual's or a firm's financial position at a particular point in time. 
B)  is a statement showing an individual's or a firm's income over a period of time. 
C)  is a statement listing the tax liabilities incurred by an individual or a firm. 
D)  can be constructed for any nonfinancial firm, but cannot be constructed for a financial firm. 
A)  is a statement showing an individual's or a firm's financial position at a particular point in time. 
B)  is a statement showing an individual's or a firm's income over a period of time. 
C)  is a statement listing the tax liabilities incurred by an individual or a firm. 
D)  can be constructed for any nonfinancial firm, but cannot be constructed for a financial firm.

Question 15

Community banks often charge ________ interest rates on business loans than do large banks,and the interest rates charged by community banks are usually ________ than the interest rates on credit cards.

Accepted Answer

A)  higher; higher 
B)  higher; lower 
C)  lower; higher 
D)  lower; lower 
A)  higher; higher 
B)  higher; lower 
C)  lower; higher 
D)  lower; lower

Question 16

A checkable deposit that pays no interest is known as a

Accepted Answer

A)  demand deposit. 
B)  certificate of deposit. 
C)  NOW account. 
D)  time deposit. 
A)  demand deposit. 
B)  certificate of deposit. 
C)  NOW account. 
D)  time deposit.

Question 17

In order to reduce the likelihood of excessive leverage in the banking system,governments have traditionally

Accepted Answer

A)  imposed capital requirements on commercial banks. 
B)  imposed capital requirement on investment banks. 
C)  imposed capital requirements on both commercial and investment banks. 
D)  imposed asset requirements on all banks. 
A)  imposed capital requirements on commercial banks. 
B)  imposed capital requirement on investment banks. 
C)  imposed capital requirements on both commercial and investment banks. 
D)  imposed asset requirements on all banks.

Question 18

The interest rate on unsecured loans between banks is called the

Accepted Answer

A)  discount rate. 
B)  repurchase rate. 
C)  T-bill rate. 
D)  federal funds rate. 
A)  discount rate. 
B)  repurchase rate. 
C)  T-bill rate. 
D)  federal funds rate.

Question 19

What is a repurchase agreement?

Accepted Answer

Banks sell securitie

Question 20

Banks experience interest rate risk

Accepted Answer

A)  if adverse selection problems are particularly severe. 
B)  if moral hazard problems are particularly severe. 
C)  on any investment that has high information costs. 
D)  if changes in interest rates cause bank profits to fluctuate. 
A)  if adverse selection problems are particularly severe. 
B)  if moral hazard problems are particularly severe. 
C)  on any investment that has high information costs. 
D)  if changes in interest rates cause bank profits to fluctuate.

Congress introduced deposit insurance in response to

The McFadden Act of 1927

What is an important difference between certificates of deposits (CDs)worth less than $100,000 compared to those worth $100,000 or more?

Short-term loans between banks are called

The sensitivity of bank capital to market interest rates is measured by

Small business loans are to securitize than are mortgage loans and are to securitize than are balances on credit cards.

The ratio of bank capital to bank assets is known as the bank's

Explicit provisions in a loan agreement that prohibit the borrower from engaging in certain activities is called

Which of the following is a hybrid of a checking and savings account?

As of 2016,the bank portion of TARP

Which of the following statements about checkable deposits is correct?

The ratio of a bank's after-tax profit to bank capital is known as

Federal funds are

A balance sheet

Community banks often charge interest rates on business loans than do large banks,and the interest rates charged by community banks are usually than the interest rates on credit cards.

A checkable deposit that pays no interest is known as a

In order to reduce the likelihood of excessive leverage in the banking system,governments have traditionally

The interest rate on unsecured loans between banks is called the

What is a repurchase agreement?

Banks experience interest rate risk

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters

Exam 10: The Economics of Banking

Congress introduced deposit insurance in response to

The McFadden Act of 1927

What is an important difference between certificates of deposits (CDs)worth less than $100,000 compared to those worth $100,000 or more?

Short-term loans between banks are called

The sensitivity of bank capital to market interest rates is measured by

Small business loans are ________ to securitize than are mortgage loans and are ________ to securitize than are balances on credit cards.

The ratio of bank capital to bank assets is known as the bank's

Explicit provisions in a loan agreement that prohibit the borrower from engaging in certain activities is called

Which of the following is a hybrid of a checking and savings account?

As of 2016,the bank portion of TARP

Which of the following statements about checkable deposits is correct?

The ratio of a bank's after-tax profit to bank capital is known as

Federal funds are

A balance sheet

Community banks often charge ________ interest rates on business loans than do large banks,and the interest rates charged by community banks are usually ________ than the interest rates on credit cards.

A checkable deposit that pays no interest is known as a

In order to reduce the likelihood of excessive leverage in the banking system,governments have traditionally

The interest rate on unsecured loans between banks is called the

What is a repurchase agreement?

Banks experience interest rate risk

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters

Small business loans are to securitize than are mortgage loans and are to securitize than are balances on credit cards.

Community banks often charge interest rates on business loans than do large banks,and the interest rates charged by community banks are usually than the interest rates on credit cards.