Question 1

U.S. banks have penetrated overseas markets for which of the following reasons?

Accepted Answer

A)  Financial needs of their corporate customers expanding abroad 
B)  Access to funds from the Eurodollar markets 
C)  Fewer regulatory barriers and less competition 
D)  All of the above 
E)  None of the above 
A)  Financial needs of their corporate customers expanding abroad 
B)  Access to funds from the Eurodollar markets 
C)  Fewer regulatory barriers and less competition 
D)  All of the above 
E)  None of the above

Question 2

Most consumers don't like POS terminals because of the loss of check book float.

Accepted Answer

A) True 
 B)False

Question 3

The increase in nonbanking activity by bank holding companies is an attempt to:

Accepted Answer

A)  Diversify 
B)  Reduce risk 
C)  Gain access to a broader market 
D)  All of the above 
E)  None of the above 
A)  Diversify 
B)  Reduce risk 
C)  Gain access to a broader market 
D)  All of the above 
E)  None of the above

Question 4

Using the the description or the definition below, identify each of the terms and concepts from this chapter.
a. The number, relative sizes and types of banks in a given market or in the industry as a whole.
b. Charter of incorporation issued by a state. 
c. Charter of incorporation from the Comptroller of the Currency. 
d. Smaller financial institutions combined into larger financial institutions.

Accepted Answer

a. Banking structure

Question 5

When the unearned income and allowance for loan losses is subtracted from the value of gross loans, it is used to evaluate a bank's:

Accepted Answer

A)  Loan risk exposure 
B)  Net income 
C)  Gross income 
D)  All of the above 
E)  None of the above 
A)  Loan risk exposure 
B)  Net income 
C)  Gross income 
D)  All of the above 
E)  None of the above

Question 6

Primary reserves for a bank consist of all of the following items except one. Which one is excluded from primary reserves?

Accepted Answer

A)  Municipal bonds 
B)  Deposits at the Federal Reserve Bank 
C)  Cash in the bank's vault 
D)  Deposits held in other commercial banks 
A)  Municipal bonds 
B)  Deposits at the Federal Reserve Bank 
C)  Cash in the bank's vault 
D)  Deposits held in other commercial banks

Question 7

Merchant banks support customer projects entirely with borrowed funds.

Accepted Answer

A) True 
 B)False

Question 8

Recent bank service expansion has resulted in the development or franchising of which of the following service offerings?

Accepted Answer

A)  Security brokerage 
B)  Sales of insurance policies 
C)  Networking arrangements 
D)  Account relocation 
E)  Financial counseling
F) All of the above 
A)  Security brokerage 
B)  Sales of insurance policies 
C)  Networking arrangements 
D)  Account relocation 
E)  Financial counseling
F) All of the above

Question 9

Allowing foreign banks to operate under the same rules as domestic banks is referred to as national treatment.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following instruments are examples of bank nondeposit sources of funds?

Accepted Answer

A)  Purchases of Federal Funds 
B)  Sales of securities through repurchase agreements 
C)  Issuance of capital notes 
D)  Securitizing loans 
E)  All of the above 
A)  Purchases of Federal Funds 
B)  Sales of securities through repurchase agreements 
C)  Issuance of capital notes 
D)  Securitizing loans 
E)  All of the above

Question 11

European banks will be kept completely separate from European securities firms and insurance companies under the terms of the Maastricht Treaty and the integrated European Community (EC).

Accepted Answer

A) True 
 B)False

Question 12

According to most studies of bank costs, a 100 percent rise in deposit and loan accounts results in only a 50 percent increase in the cost of bank operations.

Accepted Answer

A) True 
 B)False

Question 13

The dominant financial institution in the U.S. and in the economies of most major industrialized countries is the commercial bank.

Accepted Answer

A) True 
 B)False

Question 14

A limited-service facility operated by a bank in a foreign country that cannot take deposits or book loans is a:

Accepted Answer

A)  Subsidiary bank 
B)  International banking facility (IBF) 
C)  Joint venture 
D)  Branch office 
E)  Representative office 
A)  Subsidiary bank 
B)  International banking facility (IBF) 
C)  Joint venture 
D)  Branch office 
E)  Representative office

Question 15

The Graham Leach Bliley Act allowed the creation of financial services holding companies (FHC) in 1999.

Accepted Answer

A) True 
 B)False

Question 16

Merchant and Universal banks tend to make shorter-term investments than traditional banks.

Accepted Answer

A) True 
 B)False

Question 17

In recent years, demand and savings accounts have risen as a percentage of total bank sources of funds.

Accepted Answer

A) True 
 B)False

Question 18

MMDAs and Super NOWs carry higher yields than checking or savings deposits.

Accepted Answer

A) True 
 B)False

Exam 14: Banking and Financial Services: Regulations, Operations, and Trends

U.S. banks have penetrated overseas markets for which of the following reasons?

Most consumers don't like POS terminals because of the loss of check book float.

The increase in nonbanking activity by bank holding companies is an attempt to:

When the unearned income and allowance for loan losses is subtracted from the value of gross loans, it is used to evaluate a bank's:

Primary reserves for a bank consist of all of the following items except one. Which one is excluded from primary reserves?

Merchant banks support customer projects entirely with borrowed funds.

Recent bank service expansion has resulted in the development or franchising of which of the following service offerings?

Allowing foreign banks to operate under the same rules as domestic banks is referred to as national treatment.

Which of the following instruments are examples of bank nondeposit sources of funds?

European banks will be kept completely separate from European securities firms and insurance companies under the terms of the Maastricht Treaty and the integrated European Community (EC).

According to most studies of bank costs, a 100 percent rise in deposit and loan accounts results in only a 50 percent increase in the cost of bank operations.

The dominant financial institution in the U.S. and in the economies of most major industrialized countries is the commercial bank.

A limited-service facility operated by a bank in a foreign country that cannot take deposits or book loans is a:

The Graham Leach Bliley Act allowed the creation of financial services holding companies (FHC) in 1999.

Merchant and Universal banks tend to make shorter-term investments than traditional banks.

In recent years, demand and savings accounts have risen as a percentage of total bank sources of funds.

MMDAs and Super NOWs carry higher yields than checking or savings deposits.

Understanding the Financial System and Its Impact on the Economy and Markets

Financial Systems, Monetary Units, and the Role of Money in the Economy

Financial Indices, Market Information, and Economic Data

The Financial Crisis and Its Impact on the Mortgage Market and Economy

Understanding Interest Rates, Savings, and the Wealth Effect

Financial Concepts and Interest Rates

Effects of Inflation and Yield Curves on Stock Prices and Investments

Understanding Risk and Market Factors in Financial Securities

Exploring Financial Markets and Hedging Strategies

Factors Affecting the Volume of CDs

Exploring the Reserve Accounting System, Money Markets, and Financial Instruments

Exploring Central Banks and Their Impact on the Economy and Financial System

Central Banking and Monetary Policy: Exploring Tools and Strategies

Comparative Analysis of Financial Institutions and Their Operations

Exploring Various Aspects of Pension Funds, Finance Companies, and Insurance Industry

The Impact of Deregulation and Regulation on Financial Institutions and Banking Industry in the United States

Treasury Auctions, Public Debt, and Government Borrowing: Exploring the Us Treasury System

Corporate Bond Pricing, Market Development, and Financing Strategies

The Truth About Regulation Fd and Stock Holdings: Debunking Common Myths in the Financial Market

Flexible Savings Account Options

Mortgage Market and Mortgage Instruments

International Financial Transactions and Balance of Payments

International Banking and Financial Regulations

Exploring the Complexities of Financial Services and Regulation

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