Question 1

The 1978 International Bank Act

Accepted Answer

A)  prohibited foreign banks from establishing any new U.S.banking operations. 
B)  allowed U.S.banks to engage in a wider range of nonbanking activities overseas. 
C)  allowed U.S.banks to take equity positions in overseas business ventures. 
D)  reduced the competitive advantage of foreign banks over U.S.banks. 
E)  All of the above. 
A)  prohibited foreign banks from establishing any new U.S.banking operations. 
B)  allowed U.S.banks to engage in a wider range of nonbanking activities overseas. 
C)  allowed U.S.banks to take equity positions in overseas business ventures. 
D)  reduced the competitive advantage of foreign banks over U.S.banks. 
E)  All of the above.

Question 2

All else equal,a decrease in reserve requirements will cause

Accepted Answer

A)  state and local government expenditures to fall. 
B)  inflation expectations to fall. 
C)  an increase in the Fed Funds rate. 
D)  excess reserves to increase. 
E)  All of the above will occur. 
A)  state and local government expenditures to fall. 
B)  inflation expectations to fall. 
C)  an increase in the Fed Funds rate. 
D)  excess reserves to increase. 
E)  All of the above will occur.

Question 3

Most of the financial panics experienced by the United States in the past can be traced to the behavior of financial intermediaries who either took on too much risk or behaved unethically.

Accepted Answer

A) True 
 B)False

Question 4

The liabilities of financial institutions primarily consist of loans.

Accepted Answer

A) True 
 B)False

Question 5

The Federal Reserve has a major influence on financial markets.

Accepted Answer

A) True 
 B)False

Question 6

Bank panics can cause an economic recession.

Accepted Answer

A) True 
 B)False

Question 7

Demand deposits represent the largest asset category for commercial banks.

Accepted Answer

A) True 
 B)False

Question 8

Depository institutions create money when they use their excess reserves to make loans or acquire new investments.

Accepted Answer

A) True 
 B)False

Question 9

A goldsmith who operated under strict 100 percent reserve requirements

Accepted Answer

A)  was similar to today's depository institutions. 
B)  served only a safekeeping function in the economy. 
C)  was able to make loans by issuing deposit receipts to borrowers. 
D)  acted as an important credit institution in the local economy. 
E)  All of the above. 
A)  was similar to today's depository institutions. 
B)  served only a safekeeping function in the economy. 
C)  was able to make loans by issuing deposit receipts to borrowers. 
D)  acted as an important credit institution in the local economy. 
E)  All of the above.

Question 10

Mutual savings banks are owned by depositors,as are mutual S&Ls.

Accepted Answer

A) True 
 B)False

Question 11

Social Security is a ____ pension plan.

Accepted Answer

A)  fully funded 
B)  private 
C)  pay-as-you go 
D)  noncontributory 
E)  divested 
A)  fully funded 
B)  private 
C)  pay-as-you go 
D)  noncontributory 
E)  divested

Question 12

A(n)____ is an investment company that accepts money from savers and then use these funds to buy various types of financial assets.

Accepted Answer

A)  savings and loans 
B)  insurance company 
C)  mutual savings bank 
D)  mutual fund 
E)  commercial bank 
A)  savings and loans 
B)  insurance company 
C)  mutual savings bank 
D)  mutual fund 
E)  commercial bank

Question 13

The Federal Reserve System controls the money supply and is not a bank regulator.

Accepted Answer

A) True 
 B)False

Question 14

The primary regulator of investment companies,such as mutual funds,is the Securities and Exchange Commission (SEC).

Accepted Answer

A) True 
 B)False

Question 15

Unlike the United States,many countries grant their banks the authority for

Accepted Answer

A)  full merchant banking,including investment banking and ownership of companies to which they lend. 
B)  deposit banking. 
C)  forming bank holding companies. 
D)  lending to foreign companies and countries. 
E)  All of the above. 
A)  full merchant banking,including investment banking and ownership of companies to which they lend. 
B)  deposit banking. 
C)  forming bank holding companies. 
D)  lending to foreign companies and countries. 
E)  All of the above.

Question 16

Life insurance companies provide protection against death.

Accepted Answer

A) True 
 B)False

Question 17

Credit unions were originally organized with the idea that consumers could pool their funds together and thereby make low-cost consumer loans to any members of the local community.

Accepted Answer

A) True 
 B)False

Question 18

The success of financial institutions in the future will depend on their ability to specialize and offer niche products to a narrow base of customers.

Accepted Answer

A) True 
 B)False

Question 19

Suppose the Federal Reserve increased deposits by $100 billion,but the reserve requirement on all deposits was 100%.What impact would the change in deposits have on the money supply?

Accepted Answer

A)  The money supply would increase by $100 billion. 
B)  The money supply would increase by an infinite amount. 
C)  The money supply would decrease by $100 billion. 
D)  The money supply would decrease by an infinite amount. 
E)  The money supply would not change. 
A)  The money supply would increase by $100 billion. 
B)  The money supply would increase by an infinite amount. 
C)  The money supply would decrease by $100 billion. 
D)  The money supply would decrease by an infinite amount. 
E)  The money supply would not change.

Question 20

The maximum amount of FDIC deposit insurance per eligible deposit account is

Accepted Answer

A)  $50,000 
B)  $100,000 
C)  $250,000 
D)  $500,000 
E)  greater than $1,000,000. 
A)  $50,000 
B)  $100,000 
C)  $250,000 
D)  $500,000 
E)  greater than $1,000,000.

The 1978 International Bank Act

All else equal,a decrease in reserve requirements will cause

Most of the financial panics experienced by the United States in the past can be traced to the behavior of financial intermediaries who either took on too much risk or behaved unethically.

The liabilities of financial institutions primarily consist of loans.

The Federal Reserve has a major influence on financial markets.

Bank panics can cause an economic recession.

Demand deposits represent the largest asset category for commercial banks.

Depository institutions create money when they use their excess reserves to make loans or acquire new investments.

A goldsmith who operated under strict 100 percent reserve requirements

Mutual savings banks are owned by depositors,as are mutual S&Ls.

Social Security is a ____ pension plan.

A(n)____ is an investment company that accepts money from savers and then use these funds to buy various types of financial assets.

The Federal Reserve System controls the money supply and is not a bank regulator.

The primary regulator of investment companies,such as mutual funds,is the Securities and Exchange Commission (SEC).

Unlike the United States,many countries grant their banks the authority for

Life insurance companies provide protection against death.

Credit unions were originally organized with the idea that consumers could pool their funds together and thereby make low-cost consumer loans to any members of the local community.

The success of financial institutions in the future will depend on their ability to specialize and offer niche products to a narrow base of customers.

Suppose the Federal Reserve increased deposits by $100 billion,but the reserve requirement on all deposits was 100%.What impact would the change in deposits have on the money supply?

The maximum amount of FDIC deposit insurance per eligible deposit account is

An Overview of Finance

Financial Assets Instruments

Financial Markets and the Investment Banking Process

The Cost of Money Interest Rates

Business Organizations and the Tax Environment

Analysis of Financial Statements

Financial Planning and Control

Time Value of Money

Valuation Concepts

Risk and Rates of Return

The Cost of Capital

Capital Budgeting

Capital Structure and Dividend Policy Decisions

Working Capital Management

Investment and Securities

Investment Analysis and Valuation Techniques

Filters

Exam 4: Financial Intermediaries and the Banking System

The 1978 International Bank Act

All else equal,a decrease in reserve requirements will cause

Most of the financial panics experienced by the United States in the past can be traced to the behavior of financial intermediaries who either took on too much risk or behaved unethically.

The liabilities of financial institutions primarily consist of loans.

The Federal Reserve has a major influence on financial markets.

Bank panics can cause an economic recession.

Demand deposits represent the largest asset category for commercial banks.

Depository institutions create money when they use their excess reserves to make loans or acquire new investments.

A goldsmith who operated under strict 100 percent reserve requirements

Mutual savings banks are owned by depositors,as are mutual S&Ls.

Social Security is a ____ pension plan.

A(n)____ is an investment company that accepts money from savers and then use these funds to buy various types of financial assets.

The Federal Reserve System controls the money supply and is not a bank regulator.

The primary regulator of investment companies,such as mutual funds,is the Securities and Exchange Commission (SEC).

Unlike the United States,many countries grant their banks the authority for

Life insurance companies provide protection against death.

Credit unions were originally organized with the idea that consumers could pool their funds together and thereby make low-cost consumer loans to any members of the local community.

The success of financial institutions in the future will depend on their ability to specialize and offer niche products to a narrow base of customers.

Suppose the Federal Reserve increased deposits by $100 billion,but the reserve requirement on all deposits was 100%.What impact would the change in deposits have on the money supply?

The maximum amount of FDIC deposit insurance per eligible deposit account is

An Overview of Finance

Financial Assets Instruments

Financial Markets and the Investment Banking Process

The Cost of Money Interest Rates

Business Organizations and the Tax Environment

Analysis of Financial Statements

Financial Planning and Control

Time Value of Money

Valuation Concepts

Risk and Rates of Return

The Cost of Capital

Capital Budgeting

Capital Structure and Dividend Policy Decisions

Working Capital Management

Investment and Securities

Investment Analysis and Valuation Techniques

Filters