Question 1

The Federal Deposit Insurance Corporation (FDIC)approves and charters all federal,or national,banks and many state banks.

Accepted Answer

A) True 
 B)False

Question 2

Financial intermediaries generally take deposits from many savers and loan all their funds to a single firm.

Accepted Answer

A) True 
 B)False

Question 3

The primary tools of the Federal Reserve monetary policy include all of the following except

Accepted Answer

A)  changing the discount rates. 
B)  open market operations. 
C)  changes in reserve requirements. 
D)  changes in the Federal Funds rate. 
E)  All of the above are monetary policy tools used by the Fed. 
A)  changing the discount rates. 
B)  open market operations. 
C)  changes in reserve requirements. 
D)  changes in the Federal Funds rate. 
E)  All of the above are monetary policy tools used by the Fed.

Question 4

The Federal Reserve's most influential policy is its reserve requirement policy.

Accepted Answer

A) True 
 B)False

Question 5

U.S.banks have been permitted to engage in a wider range of business activities in foreign countries than at home in order to be competitive with foreign banks.

Accepted Answer

A) True 
 B)False

Question 6

A mutual fund that invests primarily in short-term,low risk securities like commercial paper and Treasury bills are called ____ mutual funds.

Accepted Answer

A)  value 
B)  growth 
C)  money market 
D)  indexed 
A)  value 
B)  growth 
C)  money market 
D)  indexed

Question 7

The original purpose of deposit insurance was to

Accepted Answer

A)  prevent bank runs by large depositors. 
B)  increase the regulatory monitoring of banks. 
C)  force the banks to invest in less risky investments. 
D)  prevent bank panics by insuring the small deposits of many people. 
E)  All of the above. 
A)  prevent bank runs by large depositors. 
B)  increase the regulatory monitoring of banks. 
C)  force the banks to invest in less risky investments. 
D)  prevent bank panics by insuring the small deposits of many people. 
E)  All of the above.

Question 8

A decrease in reserve requirements should result in an increase in the total level of member bank reserves.

Accepted Answer

A) True 
 B)False

Question 9

Historically,credit unions were

Accepted Answer

A)  organized during World War I to provide savings institutions to service personnel overseas. 
B)  organized with humanitarian goals. 
C)  founded to provide consumers with low-cost loans and encourage thrift for members. 
D)  first organized in the United States. 
E)  All of the above. 
A)  organized during World War I to provide savings institutions to service personnel overseas. 
B)  organized with humanitarian goals. 
C)  founded to provide consumers with low-cost loans and encourage thrift for members. 
D)  first organized in the United States. 
E)  All of the above.

Question 10

The deposits of federal credit unions are insured by the Federal Deposit Insurance Corporation.

Accepted Answer

A) True 
 B)False

Question 11

The Fed banks are supervised by a central governing body called

Accepted Answer

A)  the Board of Governors 
B)  the Federal Open Market Committee 
C)  the Chairman of the Fed 
D)  the Federal Banking Committee 
A)  the Board of Governors 
B)  the Federal Open Market Committee 
C)  the Chairman of the Fed 
D)  the Federal Banking Committee

Question 12

With 100 percent reserve banking,little or no lending is possible.

Accepted Answer

A) True 
 B)False

Question 13

Fractional reserves mean that banks maintain less than 100 percent of customer deposits in liquid assets,or reserves.

Accepted Answer

A) True 
 B)False

Question 14

A(n)____ is a depository institution that is owned by its depositors,who are members of a common organization or association,such as an occupation,a religious group,or a community.

Accepted Answer

A)  pension fund 
B)  commercial bank 
C)  credit union 
D)  insurance company 
E)  mutual fund 
A)  pension fund 
B)  commercial bank 
C)  credit union 
D)  insurance company 
E)  mutual fund

Question 15

The most frequent common bond for credit union formation is

Accepted Answer

A)  occupational. 
B)  church-related or religious affiliation. 
C)  geographical. 
D)  ethnicity factors. 
E)  political affiliation. 
A)  occupational. 
B)  church-related or religious affiliation. 
C)  geographical. 
D)  ethnicity factors. 
E)  political affiliation.

Question 16

Federal deposit insurance has

Accepted Answer

A)  prevented bank depositor panics,but not bank failures. 
B)  prevented bank panic and bank failures. 
C)  prevented bank failures,but not bank depositor panic. 
D)  not prevented bank depositor panics,but has eliminated bank failures. 
E)  None of the above 
A)  prevented bank depositor panics,but not bank failures. 
B)  prevented bank panic and bank failures. 
C)  prevented bank failures,but not bank depositor panic. 
D)  not prevented bank depositor panics,but has eliminated bank failures. 
E)  None of the above

Question 17

Life insurance protects

Accepted Answer

A)  the insured from premature death. 
B)  the beneficiaries of the insured from the economic consequences of death. 
C)  beneficiaries from premature death. 
D)  the insured from fatal risks faced by the insured. 
E)  None of the above. 
A)  the insured from premature death. 
B)  the beneficiaries of the insured from the economic consequences of death. 
C)  beneficiaries from premature death. 
D)  the insured from fatal risks faced by the insured. 
E)  None of the above.

Question 18

The primary responsibility of the Federal Open Market Committee (FOMC)is to

Accepted Answer

A)  establish a level and growth of the money supply through open market operations to produce a stable economic environment. 
B)  supervise the examination of state member banks. 
C)  change the reserve requirements of banks. 
D)  determine the level of Federal Reserve notes allowed in circulation. 
E)  None of the above. 
A)  establish a level and growth of the money supply through open market operations to produce a stable economic environment. 
B)  supervise the examination of state member banks. 
C)  change the reserve requirements of banks. 
D)  determine the level of Federal Reserve notes allowed in circulation. 
E)  None of the above.

The Federal Deposit Insurance Corporation (FDIC)approves and charters all federal,or national,banks and many state banks.

Financial intermediaries generally take deposits from many savers and loan all their funds to a single firm.

The primary tools of the Federal Reserve monetary policy include all of the following except

The Federal Reserve's most influential policy is its reserve requirement policy.

U.S.banks have been permitted to engage in a wider range of business activities in foreign countries than at home in order to be competitive with foreign banks.

A mutual fund that invests primarily in short-term,low risk securities like commercial paper and Treasury bills are called ____ mutual funds.

The original purpose of deposit insurance was to

A decrease in reserve requirements should result in an increase in the total level of member bank reserves.

Historically,credit unions were

The deposits of federal credit unions are insured by the Federal Deposit Insurance Corporation.

The Fed banks are supervised by a central governing body called

With 100 percent reserve banking,little or no lending is possible.

Fractional reserves mean that banks maintain less than 100 percent of customer deposits in liquid assets,or reserves.

A(n)____ is a depository institution that is owned by its depositors,who are members of a common organization or association,such as an occupation,a religious group,or a community.

The most frequent common bond for credit union formation is

Federal deposit insurance has

Life insurance protects

The primary responsibility of the Federal Open Market Committee (FOMC)is to

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 Federal Deposit Insurance Corporation (FDIC)approves and charters all federal,or national,banks and many state banks.

Financial intermediaries generally take deposits from many savers and loan all their funds to a single firm.

The primary tools of the Federal Reserve monetary policy include all of the following except

The Federal Reserve's most influential policy is its reserve requirement policy.

U.S.banks have been permitted to engage in a wider range of business activities in foreign countries than at home in order to be competitive with foreign banks.

A mutual fund that invests primarily in short-term,low risk securities like commercial paper and Treasury bills are called ____ mutual funds.

The original purpose of deposit insurance was to

A decrease in reserve requirements should result in an increase in the total level of member bank reserves.

Historically,credit unions were

The deposits of federal credit unions are insured by the Federal Deposit Insurance Corporation.

The Fed banks are supervised by a central governing body called

With 100 percent reserve banking,little or no lending is possible.

Fractional reserves mean that banks maintain less than 100 percent of customer deposits in liquid assets,or reserves.

A(n)____ is a depository institution that is owned by its depositors,who are members of a common organization or association,such as an occupation,a religious group,or a community.

The most frequent common bond for credit union formation is

Federal deposit insurance has

Life insurance protects

The primary responsibility of the Federal Open Market Committee (FOMC)is to

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