Question 1

The U.S.banking system as it exists today is relatively unchanged since just before the Civil War.

Accepted Answer

A) True 
 B)False

Question 2

__________________ collect premiums on insurance policies and employee/employer contributions from pension fund participants and provide retirement benefits and insurance against major financial losses.

Accepted Answer

A) Banks 
B) Personal service firms 
C) Investment banking firms 
D) Brokerage firms 
E) none of the above 
A) Banks 
B) Personal service firms 
C) Investment banking firms 
D) Brokerage firms 
E) none of the above

Question 3

The _______________________ provided for separation of commercial banking and investment banking activities in the United States.

Accepted Answer

A) Glass Steagall Act 
B) Gramm-Leach-Bliley Act 
C) Garn-Saint Germain Act 
D) Depository Institutions Deregulation and Monetary Control Act 
A) Glass Steagall Act 
B) Gramm-Leach-Bliley Act 
C) Garn-Saint Germain Act 
D) Depository Institutions Deregulation and Monetary Control Act

Question 4

The item on the assets side of a bank's balance sheet that represents the largest proportion of bank assets is:

Accepted Answer

A) deposits 
B) owner's capital 
C) securities 
D) loans 
A) deposits 
B) owner's capital 
C) securities 
D) loans

Question 5

_______________ sell or market new securities issued by businesses to individual and institutional investors,whereas ______________ firms assist individuals who want to purchase new or existing securities issues or who want to sell previously purchased securities.

Accepted Answer

A) Brokerage firms,investment banks 
B) Investment banks,savings banks 
C) savings banks,investment banks 
D) Brokerage firms,savings banks 
E) none of the above 
A) Brokerage firms,investment banks 
B) Investment banks,savings banks 
C) savings banks,investment banks 
D) Brokerage firms,savings banks 
E) none of the above

Question 6

Which of the following is not an asset of depository institutions?

Accepted Answer

A) cash 
B) unsecured loans 
C) time deposits 
D) U.S.government securities 
A) cash 
B) unsecured loans 
C) time deposits 
D) U.S.government securities

Question 7

The Second Bank of the United States was created to:

Accepted Answer

A) replace the First Bank of the United States 
B) appease political interests 
C) restore order to chaotic banking conditions 
D) all the above 
A) replace the First Bank of the United States 
B) appease political interests 
C) restore order to chaotic banking conditions 
D) all the above

Question 8

__________________ accept savings from individuals and then lend these pooled savings to businesses,governments,and individuals.

Accepted Answer

A) Insurance companies 
B) Commercial finance companies 
C) Depository institutions 
D) Investment banks 
E) none of the above 
A) Insurance companies 
B) Commercial finance companies 
C) Depository institutions 
D) Investment banks 
E) none of the above

Question 9

Insurance companies receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.

Accepted Answer

A) True 
 B)False

Question 10

In 1989,the Financial Institution Reform,Recovery and Enforcement Act provided for all but which of the following?

Accepted Answer

A) strengthening the federal deposit insurance programs 
B) the creation of the Resolution Trust Corporation 
C) enhanced enforcing powers 
D) stronger capital standards for thrift institutions 
A) strengthening the federal deposit insurance programs 
B) the creation of the Resolution Trust Corporation 
C) enhanced enforcing powers 
D) stronger capital standards for thrift institutions

Question 11

Investment banking firms sell shares in their firms to individuals and invest the pooled proceeds in corporate and government securities.

Accepted Answer

A) True 
 B)False

Question 12

Bank solvency reflects the ability to keep the value of a bank's assets greater than its liabilities.

Accepted Answer

A) True 
 B)False

Question 13

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) specialization,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) specialization,mortgage backed securities 
E) none of the above

Question 14

An investment bank accepts deposits,makes loans,and issues checking accounts.

Accepted Answer

A) True 
 B)False

Question 15

The Monetary Control Act:

Accepted Answer

A) extended the Fed's control to thrift institutions and non-member commercial 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) extended the Fed's control to thrift institutions and non-member commercial 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 bank holding company may not engage in direct banking activities.

Accepted Answer

A) True 
 B)False

Question 17

NOW accounts:

Accepted Answer

A) are not subject to ceiling rates under Regulation Q 
B) enable depository institutions to compete effectively for funds that were flowing in large amounts to nonblank money market funds 
C) typically pay interest rates equal to that paid by money market funds 
D) all the above 
A) are not subject to ceiling rates under Regulation Q 
B) enable depository institutions to compete effectively for funds that were flowing in large amounts to nonblank money market funds 
C) typically pay interest rates equal to that paid by money market funds 
D) all the above

Question 18

A(n)_______________ mortgage is a home loan made to a borrower with a relatively low credit score indicating the likelihood that loan payments might be missed when due.

Accepted Answer

A) adjustable rate 
B) subprime 
C) credit swap 
D) high performance 
E) none of the above 
A) adjustable rate 
B) subprime 
C) credit swap 
D) high performance 
E) none of the above

Question 19

Our system of national banks:

Accepted Answer

A) was designed to destroy state banking 
B) was an integral part of the Federal Reserve Act 
C) was replaced by Federal Reserve banking 
D) came into existence during the Civil War 
A) was designed to destroy state banking 
B) was an integral part of the Federal Reserve Act 
C) was replaced by Federal Reserve banking 
D) came into existence during the Civil War

Question 20

An organization that sells or markets new securities issued by businesses to individuals and institutional investors is called a (n)

Accepted Answer

A) mutual fund 
B) investment bank 
C) insurance company 
D) brokerage firm 
A) mutual fund 
B) investment bank 
C) insurance company 
D) brokerage firm

The U.S.banking system as it exists today is relatively unchanged since just before the Civil War.

__________________ collect premiums on insurance policies and employee/employer contributions from pension fund participants and provide retirement benefits and insurance against major financial losses.

The _______________________ provided for separation of commercial banking and investment banking activities in the United States.

The item on the assets side of a bank's balance sheet that represents the largest proportion of bank assets is:

_ sell or market new securities issued by businesses to individual and institutional investors,whereas firms assist individuals who want to purchase new or existing securities issues or who want to sell previously purchased securities.

Which of the following is not an asset of depository institutions?

The Second Bank of the United States was created to:

__________________ accept savings from individuals and then lend these pooled savings to businesses,governments,and individuals.

Insurance companies receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.

In 1989,the Financial Institution Reform,Recovery and Enforcement Act provided for all but which of the following?

Investment banking firms sell shares in their firms to individuals and invest the pooled proceeds in corporate and government securities.

Bank solvency reflects the ability to keep the value of a bank's assets greater than its liabilities.

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

An investment bank accepts deposits,makes loans,and issues checking accounts.

The Monetary Control Act:

The bank holding company may not engage in direct banking activities.

NOW accounts:

A(n)_______________ mortgage is a home loan made to a borrower with a relatively low credit score indicating the likelihood that loan payments might be missed when due.

Our system of national banks:

An organization that sells or markets new securities issued by businesses to individuals and institutional investors is called a (n)

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 U.S.banking system as it exists today is relatively unchanged since just before the Civil War.

__________________ collect premiums on insurance policies and employee/employer contributions from pension fund participants and provide retirement benefits and insurance against major financial losses.

The _______________________ provided for separation of commercial banking and investment banking activities in the United States.

The item on the assets side of a bank's balance sheet that represents the largest proportion of bank assets is:

_______________ sell or market new securities issued by businesses to individual and institutional investors,whereas ______________ firms assist individuals who want to purchase new or existing securities issues or who want to sell previously purchased securities.

Which of the following is not an asset of depository institutions?

The Second Bank of the United States was created to:

__________________ accept savings from individuals and then lend these pooled savings to businesses,governments,and individuals.

Insurance companies receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.

In 1989,the Financial Institution Reform,Recovery and Enforcement Act provided for all but which of the following?

Investment banking firms sell shares in their firms to individuals and invest the pooled proceeds in corporate and government securities.

Bank solvency reflects the ability to keep the value of a bank's assets greater than its liabilities.

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

An investment bank accepts deposits,makes loans,and issues checking accounts.

The Monetary Control Act:

The bank holding company may not engage in direct banking activities.

NOW accounts:

A(n)_______________ mortgage is a home loan made to a borrower with a relatively low credit score indicating the likelihood that loan payments might be missed when due.

Our system of national banks:

An organization that sells or markets new securities issued by businesses to individuals and institutional investors is called a (n)

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

_ sell or market new securities issued by businesses to individual and institutional investors,whereas firms assist individuals who want to purchase new or existing securities issues or who want to sell previously purchased securities.

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