Question 1

Demand deposits exceed time and savings deposits for most banks.

Accepted Answer

A) True 
 B)False

Question 2

Money market deposit accounts (MMDAs) were designed to allow banks to compete fo funds with money market mutual funds (MMMFs).

Accepted Answer

A) True 
 B)False

Question 3

Implicit pricing of deposits concerns the interest rate to offer to depositors.

Accepted Answer

A) True 
 B)False

Question 4

Theoretically, the average costs of individual sources of funds are equal to one another after adjusting for risk.

Accepted Answer

A) True 
 B)False

Question 5

Theoretically, the minimum yield on bank investments that must be earned to avoid a loss in equity share values should equal the:

Accepted Answer

A)  average cost of funds 
B)  total cost of funds 
C)  the marginal weighted average cost of funds 
D)  none of the above 
A)  average cost of funds 
B)  total cost of funds 
C)  the marginal weighted average cost of funds 
D)  none of the above

Question 6

What is NOT true about Eurodollar CDs?

Accepted Answer

A)  they are insured by the FDIC 
B)  they usually have higher yields than domestic CDs 
C)  they have a smaller secondary market than domestic CDs 
D)  they are not subject to reserve requirements 
A)  they are insured by the FDIC 
B)  they usually have higher yields than domestic CDs 
C)  they have a smaller secondary market than domestic CDs 
D)  they are not subject to reserve requirements

Question 7

If the bank obtains cost-reducing benefits from the fact that the unit costs of two or more services are lower when produced jointly, as opposed to separately, the bank has benefited from:

Accepted Answer

A)  economies of scale 
B)  economies of operation 
C)  economies of scope 
D)  economies of production 
E)  none of the above 
A)  economies of scale 
B)  economies of operation 
C)  economies of scope 
D)  economies of production 
E)  none of the above

Question 8

Negotiable CDs are not marketable in the secondary market.

Accepted Answer

A) True 
 B)False

Question 9

The bank's deposit source of funds that is acquired on an impersonal basis from the financial market by offering competitive interest rates is categorized as:

Accepted Answer

A)  demand deposits 
B)  core deposits 
C)  purchased deposits 
D)  time deposits 
A)  demand deposits 
B)  core deposits 
C)  purchased deposits 
D)  time deposits

Question 10

What percent of earned, nonsalaried income not greater than $30,000 do Keogh plans allow to be deposited in a tax-deferred account?

Accepted Answer

A)  up to 15% 
B)  up to 20% 
C)  up to 25% 
D)  up to 30% 
E)  none of the above 
A)  up to 15% 
B)  up to 20% 
C)  up to 25% 
D)  up to 30% 
E)  none of the above

Question 11

Both IRA and Keogh plans are subject to a 10% tax penalty if they are withdrawn before what age?

Accepted Answer

A)  59 
B)  59 1/4 
C)  59 ½ 
D)  60 
E)  none of the above 
A)  59 
B)  59 1/4 
C)  59 ½ 
D)  60 
E)  none of the above

Question 12

Which of the following statements is true regarding NOW and MMMF accounts?

Accepted Answer

A)  both are subject to reserve requirements 
B)  both are eligible for federal deposit insurance 
C)  only NOWs are eligible for federal deposit insurance 
D)  only MMMFs are eligible for federal deposit insurance 
A)  both are subject to reserve requirements 
B)  both are eligible for federal deposit insurance 
C)  only NOWs are eligible for federal deposit insurance 
D)  only MMMFs are eligible for federal deposit insurance

Question 13

The Financial Services Modernization Act of 1999 will decrease the ability of banks to maintain strong relationships with their deposit customers.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following deposit accounts requires relatively higher reserve requirements?

Accepted Answer

A)  demand deposits 
B)  small time deposits 
C)  large time deposits 
D)  savings deposits 
A)  demand deposits 
B)  small time deposits 
C)  large time deposits 
D)  savings deposits

Question 15

Keogh plans are corporate pension plans that corporations can use to defer federal income taxes on contributions and subsequent investment earnings.

Accepted Answer

A) True 
 B)False

Question 16

The method of calculating costs of bank funds by summing the average cost of each source of funds times the proportion of total funds raised from each respective source of funds is called:

Accepted Answer

A)  weighted average costs 
B)  average costs 
C)  marginal costs 
D)  total costs 
A)  weighted average costs 
B)  average costs 
C)  marginal costs 
D)  total costs

Question 17

Core deposits are a more stable source of funds than purchased deposits.

Accepted Answer

A) True 
 B)False

Question 18

Nondeposit funds are often referred to as managed liabilities.

Accepted Answer

A) True 
 B)False

Question 19

The Garn-St Germain Act of 1982 authorized NOW accounts.

Accepted Answer

A) True 
 B)False

Question 20

An advantage of Super-NOW accounts over money market mutual fund (MMMF) accounts is federal deposit insurance.

Accepted Answer

A) True 
 B)False

Demand deposits exceed time and savings deposits for most banks.

Money market deposit accounts (MMDAs) were designed to allow banks to compete fo funds with money market mutual funds (MMMFs).

Implicit pricing of deposits concerns the interest rate to offer to depositors.

Theoretically, the average costs of individual sources of funds are equal to one another after adjusting for risk.

Theoretically, the minimum yield on bank investments that must be earned to avoid a loss in equity share values should equal the:

What is NOT true about Eurodollar CDs?

If the bank obtains cost-reducing benefits from the fact that the unit costs of two or more services are lower when produced jointly, as opposed to separately, the bank has benefited from:

Negotiable CDs are not marketable in the secondary market.

The bank's deposit source of funds that is acquired on an impersonal basis from the financial market by offering competitive interest rates is categorized as:

What percent of earned, nonsalaried income not greater than $30,000 do Keogh plans allow to be deposited in a tax-deferred account?

Both IRA and Keogh plans are subject to a 10% tax penalty if they are withdrawn before what age?

Which of the following statements is true regarding NOW and MMMF accounts?

The Financial Services Modernization Act of 1999 will decrease the ability of banks to maintain strong relationships with their deposit customers.

Which of the following deposit accounts requires relatively higher reserve requirements?

Keogh plans are corporate pension plans that corporations can use to defer federal income taxes on contributions and subsequent investment earnings.

The method of calculating costs of bank funds by summing the average cost of each source of funds times the proportion of total funds raised from each respective source of funds is called:

Core deposits are a more stable source of funds than purchased deposits.

Nondeposit funds are often referred to as managed liabilities.

The Garn-St Germain Act of 1982 authorized NOW accounts.

An advantage of Super-NOW accounts over money market mutual fund (MMMF) accounts is federal deposit insurance.

Functions and Forms of Banking

The Bank Regulatory Environment

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Commercial and Industrial Lending

Real Estate and Consumer Lending

Liquidity Management

Capital Management

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Global Financial Services

Filters

Exam 13: Managing Liabilities

Demand deposits exceed time and savings deposits for most banks.

Money market deposit accounts (MMDAs) were designed to allow banks to compete fo funds with money market mutual funds (MMMFs).

Implicit pricing of deposits concerns the interest rate to offer to depositors.

Theoretically, the average costs of individual sources of funds are equal to one another after adjusting for risk.

Theoretically, the minimum yield on bank investments that must be earned to avoid a loss in equity share values should equal the:

What is NOT true about Eurodollar CDs?

If the bank obtains cost-reducing benefits from the fact that the unit costs of two or more services are lower when produced jointly, as opposed to separately, the bank has benefited from:

Negotiable CDs are not marketable in the secondary market.

The bank's deposit source of funds that is acquired on an impersonal basis from the financial market by offering competitive interest rates is categorized as:

What percent of earned, nonsalaried income not greater than $30,000 do Keogh plans allow to be deposited in a tax-deferred account?

Both IRA and Keogh plans are subject to a 10% tax penalty if they are withdrawn before what age?

Which of the following statements is true regarding NOW and MMMF accounts?

The Financial Services Modernization Act of 1999 will decrease the ability of banks to maintain strong relationships with their deposit customers.

Which of the following deposit accounts requires relatively higher reserve requirements?

Keogh plans are corporate pension plans that corporations can use to defer federal income taxes on contributions and subsequent investment earnings.

The method of calculating costs of bank funds by summing the average cost of each source of funds times the proportion of total funds raised from each respective source of funds is called:

Core deposits are a more stable source of funds than purchased deposits.

Nondeposit funds are often referred to as managed liabilities.

The Garn-St Germain Act of 1982 authorized NOW accounts.

An advantage of Super-NOW accounts over money market mutual fund (MMMF) accounts is federal deposit insurance.

Functions and Forms of Banking

The Bank Regulatory Environment

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Commercial and Industrial Lending

Real Estate and Consumer Lending

Liquidity Management

Capital Management

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Global Financial Services

Filters