Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Limited branch banking:

Accepted Answer

A) permits banks to located offices within a geographically defined distance?of the main office 
B) is controlled by the Federal Reserve system 
C) means that banks may only engage in certain limited activities 
D) none of the above 
A) permits banks to located offices within a geographically defined distance?of the main office 
B) is controlled by the Federal Reserve system 
C) means that banks may only engage in certain limited activities 
D) none of the above

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The _______________________ established the U.S.central banking system and increased the effectiveness of commercial banking in general.

Accepted Answer

A) Glass Steagall Act 
B) National Banking Act 
C) Garn-Saint Germain Act 
D) Federal Reserve Act 
A) Glass Steagall Act 
B) National Banking Act 
C) Garn-Saint Germain Act 
D) Federal Reserve Act

Question 6

There is more of a need for international banking because of:

Accepted Answer

A) decreased international trade 
B) a stable exchange of goods and services among nations 
C) the large international trade deficit of the United States 
D) national savings and investment rates that dictate small flows of capital among nations 
A) decreased international trade 
B) a stable exchange of goods and services among nations 
C) the large international trade deficit of the United States 
D) national savings and investment rates that dictate small flows of capital among nations

Question 7

Credit unions are:

Accepted Answer

A) for profit organizations 
B) made up of individuals who possess common bonds of association 
C) institutions that derive funds from investment activities 
D) all the above 
A) for profit organizations 
B) made up of individuals who possess common bonds of association 
C) institutions that derive funds from investment activities 
D) all the above

Question 8

The Bank of North America:

Accepted Answer

A) was the first incorporated bank in the United States 
B) was patterned after the Central Bank of England 
C) was established to assist in financing the Civil War 
D) all the above 
E) none of the above 
A) was the first incorporated bank in the United States 
B) was patterned after the Central Bank of England 
C) was established to assist in financing the Civil War 
D) all the above 
E) none of the above

Question 9

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 10

__________________ are the two important forms of contractual savings organizations.

Accepted Answer

A) Insurance companies and brokerage firms 
B) banks and insurance companies 
C) Investment banks and pension funds 
D) Pension funds and brokerage firms 
E) none of the above 
A) Insurance companies and brokerage firms 
B) banks and insurance companies 
C) Investment banks and pension funds 
D) Pension funds and brokerage firms 
E) none of the above

Question 11

The Federal Reserve Act of 1913 created a system of central banks in the United States.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is false?

Accepted Answer

A) It is not possible for a bank to invest all of its funds in profitable loans or securities. 
B) All states now permit statewide branch banking. 
C) Regulation Q established interest rate ceilings on time and savings deposits. 
D) The depositors of a bank are creditors and hence have a claim that is superior to that of stockholders in the event of liquidation. 
A) It is not possible for a bank to invest all of its funds in profitable loans or securities. 
B) All states now permit statewide branch banking. 
C) Regulation Q established interest rate ceilings on time and savings deposits. 
D) The depositors of a bank are creditors and hence have a claim that is superior to that of stockholders in the event of liquidation.

Question 13

The interest rate charged by banks for short-term unsecured loans to their highest quality business customers is referred to as the:

Accepted Answer

A) discount rate 
B) federal fund rate 
C) prime rate 
D) all the above 
A) discount rate 
B) federal fund rate 
C) prime rate 
D) all the above

Question 14

The structure of the modern banking system includes commercial banks,savings and loans,mutual savings banks,and credit unions.

Accepted Answer

A) True 
 B)False

Question 15

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 16

The item on the liabilities and equity section of a bank's balance sheet that represents the smallest proportion of bank's assets is:

Accepted Answer

A) deposits 
B) owner's capital 
C) securities 
D) federal funds 
A) deposits 
B) owner's capital 
C) securities 
D) federal funds

Question 17

Which of the following institutions is not part of the modern banking system?

Accepted Answer

A) credit unions 
B) savings and loan associations 
C) mutual funds 
D) mutual savings banks 
A) credit unions 
B) savings and loan associations 
C) mutual funds 
D) mutual savings banks

Question 18

The notes of the Bank of North America

Accepted Answer

A) served as a circulating medium of exchange 
B) loaned liberally to the government 
C) were redeemed in metallic coins upon demand 
D) all the above 
E) none of the above 
A) served as a circulating medium of exchange 
B) loaned liberally to the government 
C) were redeemed in metallic coins upon demand 
D) all the above 
E) none of the above

Question 19

The function of the capital accounts of a commercial bank is to:

Accepted Answer

A) meet bank reserve requirements 
B) provide funds for real estate loans 
C) provide a cushion for possible bank losses 
D) support the purchase of bank buildings and equipment 
A) meet bank reserve requirements 
B) provide funds for real estate loans 
C) provide a cushion for possible bank losses 
D) support the purchase of bank buildings and equipment

Question 20

Which of the following statements is most correct?

Accepted Answer

A) FDIC membership is required only for banks having national charter. 
B) The First Bank of the United States was the first incorporated bank created along modern banking lines. 
C) Secured loans represent the single most important activity of the commercial bank. 
D) All the above statements are false. 
A) FDIC membership is required only for banks having national charter. 
B) The First Bank of the United States was the first incorporated bank created along modern banking lines. 
C) Secured loans represent the single most important activity of the commercial bank. 
D) All the above statements are false.

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

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

Limited branch banking:

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

The _______________________ established the U.S.central banking system and increased the effectiveness of commercial banking in general.

There is more of a need for international banking because of:

Credit unions are:

The Bank of North America:

Commercial banks obtain the bulk of their loanable funds from:

__________________ are the two important forms of contractual savings organizations.

The Federal Reserve Act of 1913 created a system of central banks in the United States.

Which of the following statements is false?

The interest rate charged by banks for short-term unsecured loans to their highest quality business customers is referred to as the:

The structure of the modern banking system includes commercial banks,savings and loans,mutual savings banks,and credit unions.

The Depository Institutions Deregulation and Monetary Control Act:

The item on the liabilities and equity section of a bank's balance sheet that represents the smallest proportion of bank's assets is:

Which of the following institutions is not part of the modern banking system?

The notes of the Bank of North America

The function of the capital accounts of a commercial bank is to:

Which of the following statements is most correct?

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 Valuation

Securities 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

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

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

Limited branch banking:

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

The _______________________ established the U.S.central banking system and increased the effectiveness of commercial banking in general.

There is more of a need for international banking because of:

Credit unions are:

The Bank of North America:

Commercial banks obtain the bulk of their loanable funds from:

__________________ are the two important forms of contractual savings organizations.

The Federal Reserve Act of 1913 created a system of central banks in the United States.

Which of the following statements is false?

The interest rate charged by banks for short-term unsecured loans to their highest quality business customers is referred to as the:

The structure of the modern banking system includes commercial banks,savings and loans,mutual savings banks,and credit unions.

The Depository Institutions Deregulation and Monetary Control Act:

The item on the liabilities and equity section of a bank's balance sheet that represents the smallest proportion of bank's assets is:

Which of the following institutions is not part of the modern banking system?

The notes of the Bank of North America

The function of the capital accounts of a commercial bank is to:

Which of the following statements is most correct?

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 Valuation

Securities 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