Question 1

The principal liabilities of all depository institutions are:

Accepted Answer

A) certificates of deposits 
B) deposits 
C) loans 
D) all the above 
A) certificates of deposits 
B) deposits 
C) loans 
D) all the above

Question 2

If $5,000 is borrowed on a discount basis and the rate is 10 percent,the annual percentage interest rate on this loan would be:

Accepted Answer

A) 10% 
B) 10.1% 
C) 11% 
D) 11.1% 
E) none of the above 
A) 10% 
B) 10.1% 
C) 11% 
D) 11.1% 
E) none of the above

Question 3

The National Banking Act of 1864 made it possible for banks to receive federal charters.

Accepted Answer

A) True 
 B)False

Question 4

An open-end investment company that can issue an unlimited number of its shares to investors and use the pooled proceeds to purchase corporate and government securities is called a (n)

Accepted Answer

A) mutual fund 
B) pension fund 
C) insurance company 
D) brokerage firm 
A) mutual fund 
B) pension fund 
C) insurance company 
D) brokerage firm

Question 5

_______________ 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 
E) none of the above 
A) Commercial banks 
B) Thrift institutions 
C) Savings banks 
D) Credit unions 
E) none of the above

Question 6

_______________ are non-commercial bank depository institutions that include savings banks and credit unions,which accumulate individual savings and lend primarily to other individuals.

Accepted Answer

A) Banks 
B) Securities firms 
C) Pension funds 
D) Finance companies 
E) none of the above 
A) Banks 
B) Securities firms 
C) Pension funds 
D) Finance companies 
E) none of the above

Question 7

International banking exists when banks operate in more than one country.

Accepted Answer

A) True 
 B)False

Question 8

Commercial banks are aggressive and often assume large amounts of risk.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following are not thrift institutions?

Accepted Answer

A) credit unions 
B) savings and loan institutions 
C) commercial banks 
D) all the above 
A) credit unions 
B) savings and loan institutions 
C) commercial banks 
D) all the above

Question 10

Investment banking firms sell or market new securities issued by businesses to individual and institutional investors.

Accepted Answer

A) True 
 B)False

Question 11

__________________ are the two important forms of contractual savings organizations.

Accepted Answer

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

Question 12

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) none of the above 
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) none of the above

Question 13

Which of the following statements is most correct?

Accepted Answer

A) New capital adequacy standards were established for foreign banking offices in this country to achieve an 8% risk-based capital ratio by the end of 1992 in order to conform to domestic bank requirements. 
B) The proportion of branch banking offices has doubled since 1951. 
C) The National Banking Act provided that national banks could issue their own?paper money secured either by their own deposits or government bonds. 
D) All the above statements are equally correct. 
A) New capital adequacy standards were established for foreign banking offices in this country to achieve an 8% risk-based capital ratio by the end of 1992 in order to conform to domestic bank requirements. 
B) The proportion of branch banking offices has doubled since 1951. 
C) The National Banking Act provided that national banks could issue their own?paper money secured either by their own deposits or government bonds. 
D) All the above statements are equally correct.

Question 14

The First Bank of the United States:

Accepted Answer

A) is still in operation in Massachusetts 
B) transferred funds from region to region 
C) was unchartered 
D) all the above 
A) is still in operation in Massachusetts 
B) transferred funds from region to region 
C) was unchartered 
D) all the above

Question 15

In general,the effective rate of interest on a discount loan

Accepted Answer

A) is lower than that on standard loan 
B) is higher than that on a standard loan 
C) is identical to that on a standard loan 
D) none of the above 
A) is lower than that on standard loan 
B) is higher than that on a standard loan 
C) is identical to that on a standard loan 
D) none of the above

Question 16

Secondary reserves are vault cash and deposits held at other depository institutions and at Federal Reserve Banks.

Accepted Answer

A) True 
 B)False

Question 17

Investment banking firms assist individuals to purchase new or existing securities issues or to sell previously purchased securities.

Accepted Answer

A) True 
 B)False

Question 18

Pension funds receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is most correct?

Accepted Answer

A) The National Banking Act of 1894 has long lost any relationships to?modern bank regulation. 
B) The Federal Reserve System was created in large measure to force state?chartered banks into conformity with nationally chartered banks. 
C) "Wildcat banking" during the first half of the 1800s referred to risky banking practices by many state banks,such as excessive note issues,lack of adequate bank capital,and insufficient reserves against their notes and deposits. 
D) All the above statements are equally correct. 
A) The National Banking Act of 1894 has long lost any relationships to?modern bank regulation. 
B) The Federal Reserve System was created in large measure to force state?chartered banks into conformity with nationally chartered banks. 
C) "Wildcat banking" during the first half of the 1800s referred to risky banking practices by many state banks,such as excessive note issues,lack of adequate bank capital,and insufficient reserves against their notes and deposits. 
D) All the above statements are equally correct.

Question 20

The process of ______________ which is the process of pooling and packaging mortgage loans into debt securities resulted in the creation of ______________.

Accepted Answer

A) securitization,pooled asset loans 
B) portfolio composition,mortgage backed securities 
C) issuing mortgage backed securities,securitization 
D) securitization,mortgage backed securities 
E) none of the above 
A) securitization,pooled asset loans 
B) portfolio composition,mortgage backed securities 
C) issuing mortgage backed securities,securitization 
D) securitization,mortgage backed securities 
E) none of the above

The principal liabilities of all depository institutions are:

If $5,000 is borrowed on a discount basis and the rate is 10 percent,the annual percentage interest rate on this loan would be:

The National Banking Act of 1864 made it possible for banks to receive federal charters.

An open-end investment company that can issue an unlimited number of its shares to investors and use the pooled proceeds to purchase corporate and government securities is called a (n)

_______________ 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.

_______________ are non-commercial bank depository institutions that include savings banks and credit unions,which accumulate individual savings and lend primarily to other individuals.

International banking exists when banks operate in more than one country.

Commercial banks are aggressive and often assume large amounts of risk.

Which of the following are not thrift institutions?

Investment banking firms sell or market new securities issued by businesses to individual and institutional investors.

__________________ are the two important forms of contractual savings organizations.

Statewide branch banking:

Which of the following statements is most correct?

The First Bank of the United States:

In general,the effective rate of interest on a discount loan

Secondary reserves are vault cash and deposits held at other depository institutions and at Federal Reserve Banks.

Investment banking firms assist individuals to purchase new or existing securities issues or to sell previously purchased securities.

Pension funds receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees.

Which of the following statements is most correct?

The process of which is the process of pooling and packaging mortgage loans into debt securities resulted in the creation of .

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

The principal liabilities of all depository institutions are:

If $5,000 is borrowed on a discount basis and the rate is 10 percent,the annual percentage interest rate on this loan would be:

The National Banking Act of 1864 made it possible for banks to receive federal charters.

An open-end investment company that can issue an unlimited number of its shares to investors and use the pooled proceeds to purchase corporate and government securities is called a (n)

_______________ 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.

_______________ are non-commercial bank depository institutions that include savings banks and credit unions,which accumulate individual savings and lend primarily to other individuals.

International banking exists when banks operate in more than one country.

Commercial banks are aggressive and often assume large amounts of risk.

Which of the following are not thrift institutions?

Investment banking firms sell or market new securities issued by businesses to individual and institutional investors.

__________________ are the two important forms of contractual savings organizations.

Statewide branch banking:

Which of the following statements is most correct?

The First Bank of the United States:

In general,the effective rate of interest on a discount loan

Secondary reserves are vault cash and deposits held at other depository institutions and at Federal Reserve Banks.

Investment banking firms assist individuals to purchase new or existing securities issues or to sell previously purchased securities.

Pension funds receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees.

Which of the following statements is most correct?

The process of ______________ which is the process of pooling and packaging mortgage loans into debt securities resulted in the creation of ______________.

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

The process of which is the process of pooling and packaging mortgage loans into debt securities resulted in the creation of .