Question 1

Compare and contrast commercial banks and investment banks.

Accepted Answer

Generally speaking,commercial banks are

Question 2

Compare and contrast retail banks and merchant banks.

Accepted Answer

Retail banks service consumers with chec

Question 3

EBL is a financial institution headquartered in Rochester,New York.Membership in EBL is open to residents of Rochester and is financed by the members themselves.EBL accepts deposits from its members and provides loans to its members.EBL provides a low-cost finance option to the residents of Rochester.EBL is a ________.

Accepted Answer

A)  loan association 
B)  retail bank 
C)  credit union 
D)  thrift bank 
E)  merchant bank 
A)  loan association 
B)  retail bank 
C)  credit union 
D)  thrift bank 
E)  merchant bank

Question 4

Finance companies are non-bank institutions that lend money to consumers and businesses for a wide variety of purposes.

Accepted Answer

A) True 
 B)False

Question 5

What is the relationship between the Fed's reserve requirement and the money supply?

Accepted Answer

All depository institutions (those that

Question 6

Money serves as a ________ when it is used to measure the value of goods and services.

Accepted Answer

A)  unit of accounting 
B)  means of payment 
C)  store of value 
D)  medium of exchange 
E)  standard of deferred payment 
A)  unit of accounting 
B)  means of payment 
C)  store of value 
D)  medium of exchange 
E)  standard of deferred payment

Question 7

Which of the following federal actions is aimed at increasing the money supply in markets?

Accepted Answer

A)  The Fed imposes more selective credit controls on loans. 
B)  The Fed buys Treasury bonds from the market. 
C)  The Federal Reserve raises the discount rate. 
D)  The Federal Reserve controls the issue of new loans. 
E)  The Federal Reserve increases the reserve requirement. 
A)  The Fed imposes more selective credit controls on loans. 
B)  The Fed buys Treasury bonds from the market. 
C)  The Federal Reserve raises the discount rate. 
D)  The Federal Reserve controls the issue of new loans. 
E)  The Federal Reserve increases the reserve requirement.

Question 8

What is the Dodd-Frank Act and why was it passed? What major points does Dodd-Frank emphasize?

Accepted Answer

In the years following the 2008 financia

Question 9

The Dodd-Frank Act created the Financial Stability Oversight Council to monitor for systemic risks.

Accepted Answer

A) True 
 B)False

Question 10

Both Fannie Mae and Freddie Mac participate in the secondary mortgage market by purchasing loans originated by banks and other lenders.

Accepted Answer

A) True 
 B)False

Question 11

Banking institutions that offer deposit accounts and focus on offering home mortgage loans are known as ________.

Accepted Answer

A)  merchant banks 
B)  retail banks 
C)  thrift banks 
D)  private banks 
E)  credit unions 
A)  merchant banks 
B)  retail banks 
C)  thrift banks 
D)  private banks 
E)  credit unions

Question 12

Non-bank companies that use their own funds to offer mortgages are known as mortgage brokers.

Accepted Answer

A) True 
 B)False

Question 13

Both Fannie Mae and Freddie Mac are agencies of the FDIC.

Accepted Answer

A) True 
 B)False

Question 14

The LTV value of the home loans issued by a bank is 80 percent.This means that the ________.

Accepted Answer

A)  borrowers must make a down payment of at least 20 percent 
B)  loan is offered at a low interest rate 
C)  loan is offered at prime rate to borrowers 
D)  interest charged on the loan amount is 8 percent 
E)  borrowers should provide a third-party guarantee for 80 percent of the loan amount 
A)  borrowers must make a down payment of at least 20 percent 
B)  loan is offered at a low interest rate 
C)  loan is offered at prime rate to borrowers 
D)  interest charged on the loan amount is 8 percent 
E)  borrowers should provide a third-party guarantee for 80 percent of the loan amount

Question 15

In a ________,borrowers stop making payments on a loan.

Accepted Answer

A)  liquidity crisis 
B)  bubble 
C)  foreclosure 
D)  default 
E)  market squeeze 
A)  liquidity crisis 
B)  bubble 
C)  foreclosure 
D)  default 
E)  market squeeze

Question 16

________ are non-bank institutions that lend money to consumers and businesses for such purposes as cars,home improvements,and purchases.

Accepted Answer

A)  Finance companies 
B)  Mortgage brokers 
C)  Thrifts 
D)  Credit unions 
E)  Loan associations 
A)  Finance companies 
B)  Mortgage brokers 
C)  Thrifts 
D)  Credit unions 
E)  Loan associations

Question 17

In the secondary mortgage market,________.

Accepted Answer

A)  mortgage originators sell their loans to investors 
B)  deposits are collected to fund mortgages 
C)  non-banking companies issue prime loans 
D)  stocks are traded to fund mortgages 
E)  non-banking companies issue subprime loans 
A)  mortgage originators sell their loans to investors 
B)  deposits are collected to fund mortgages 
C)  non-banking companies issue prime loans 
D)  stocks are traded to fund mortgages 
E)  non-banking companies issue subprime loans

Question 18

The ________ is a fundamental driver of economic behavior because it influences short-term and long-term interest rates,foreign exchange rates,and inflation.

Accepted Answer

A)  retail banking manifesto 
B)  amortization ratio 
C)  global prime rate 
D)  federal funds rate 
E)  prime mortgage market 
A)  retail banking manifesto 
B)  amortization ratio 
C)  global prime rate 
D)  federal funds rate 
E)  prime mortgage market

Question 19

________ are non-bank companies that initiate loans on behalf of a mortgage lender in exchange for a fee.

Accepted Answer

A)  Mortgage brokers 
B)  Credit unions 
C)  Thrifts 
D)  Loan associations 
E)  Independent mortgage companies 
A)  Mortgage brokers 
B)  Credit unions 
C)  Thrifts 
D)  Loan associations 
E)  Independent mortgage companies

Question 20

In an adjustable rate mortgage,________.

Accepted Answer

A)  collateral is not accepted as security 
B)  initial interest rates are very high 
C)  amortization is always positive 
D)  borrowers will have a low credit rating 
E)  people can buy more house than they can afford 
A)  collateral is not accepted as security 
B)  initial interest rates are very high 
C)  amortization is always positive 
D)  borrowers will have a low credit rating 
E)  people can buy more house than they can afford

Compare and contrast commercial banks and investment banks.

Compare and contrast retail banks and merchant banks.

Finance companies are non-bank institutions that lend money to consumers and businesses for a wide variety of purposes.

What is the relationship between the Fed's reserve requirement and the money supply?

Money serves as a ________ when it is used to measure the value of goods and services.

Which of the following federal actions is aimed at increasing the money supply in markets?

What is the Dodd-Frank Act and why was it passed? What major points does Dodd-Frank emphasize?

The Dodd-Frank Act created the Financial Stability Oversight Council to monitor for systemic risks.

Both Fannie Mae and Freddie Mac participate in the secondary mortgage market by purchasing loans originated by banks and other lenders.

Banking institutions that offer deposit accounts and focus on offering home mortgage loans are known as ________.

Non-bank companies that use their own funds to offer mortgages are known as mortgage brokers.

Both Fannie Mae and Freddie Mac are agencies of the FDIC.

The LTV value of the home loans issued by a bank is 80 percent.This means that the ________.

In a ________,borrowers stop making payments on a loan.

________ are non-bank institutions that lend money to consumers and businesses for such purposes as cars,home improvements,and purchases.

In the secondary mortgage market,________.

The ________ is a fundamental driver of economic behavior because it influences short-term and long-term interest rates,foreign exchange rates,and inflation.

________ are non-bank companies that initiate loans on behalf of a mortgage lender in exchange for a fee.

In an adjustable rate mortgage,________.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

Filters

Exam 20: The Money Supply and Banking Systems

Compare and contrast commercial banks and investment banks.

Compare and contrast retail banks and merchant banks.

Finance companies are non-bank institutions that lend money to consumers and businesses for a wide variety of purposes.

What is the relationship between the Fed's reserve requirement and the money supply?

Money serves as a ________ when it is used to measure the value of goods and services.

Which of the following federal actions is aimed at increasing the money supply in markets?

What is the Dodd-Frank Act and why was it passed? What major points does Dodd-Frank emphasize?

The Dodd-Frank Act created the Financial Stability Oversight Council to monitor for systemic risks.

Both Fannie Mae and Freddie Mac participate in the secondary mortgage market by purchasing loans originated by banks and other lenders.

Banking institutions that offer deposit accounts and focus on offering home mortgage loans are known as ________.

Non-bank companies that use their own funds to offer mortgages are known as mortgage brokers.

Both Fannie Mae and Freddie Mac are agencies of the FDIC.

The LTV value of the home loans issued by a bank is 80 percent.This means that the ________.

In a ________,borrowers stop making payments on a loan.

________ are non-bank institutions that lend money to consumers and businesses for such purposes as cars,home improvements,and purchases.

In the secondary mortgage market,________.

The ________ is a fundamental driver of economic behavior because it influences short-term and long-term interest rates,foreign exchange rates,and inflation.

________ are non-bank companies that initiate loans on behalf of a mortgage lender in exchange for a fee.

In an adjustable rate mortgage,________.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

Filters