Question 1

One of the benefits for a bank securing a federal (national)charter instead of a state charter is that:

Accepted Answer

A) federal rules can pre-empt state laws. 
B) a federal charter is generally easier and less costly to secure. 
C) a federal charter often allows to lend a higher percentage of capital to a single borrower. 
D) a federal charter usually entails lower supervisory fees. 
E) None of the options are correct. 
A) federal rules can pre-empt state laws. 
B) a federal charter is generally easier and less costly to secure. 
C) a federal charter often allows to lend a higher percentage of capital to a single borrower. 
D) a federal charter usually entails lower supervisory fees. 
E) None of the options are correct.

Question 2

The Jones State Bank is planning to add a branch office on the west side of Edmond,Oklahoma.The bank has discovered that area surrounding the proposed site averages 4 houses per acre and has several subdivisions that each has 300 to 400 homes.Which factor would this address when considering whether to add a new branch?

Accepted Answer

A) Traffic count 
B) Number of retail shops 
C) Average age of the local population 
D) Population Density 
E) Population Growth 
A) Traffic count 
B) Number of retail shops 
C) Average age of the local population 
D) Population Density 
E) Population Growth

Question 3

The FDIC Improvement Act of 1991 requires a bank closing one of its branches to give its customers a minimum notice of:

Accepted Answer

A) 90 days. 
B) 60 days. 
C) 30 days. 
D) 10 days. 
E) None of the options are correct. 
A) 90 days. 
B) 60 days. 
C) 30 days. 
D) 10 days. 
E) None of the options are correct.

Question 4

Depository institutions are required to get their deposits insured from the ____________.

Accepted Answer

FDIC (Fede

Question 5

Applying for a bank charter from the Comptroller of the Currency is simultaneously followed by an application for FDIC insurance,to expedite the formation process and save duplication of efforts.

Accepted Answer

A) True 
 B)False

Question 6

Murphy National Bank is thinking about adding a new branch in a very different market area.It estimates that the new office will have an expected return of 16% with a standard deviation of 8%.Currently,it has an expected return of 12% with a standard deviation of 4%.The correlation between the returns on the new branch and the bank's current returns is estimated to be 0.20.The bank estimates that the new branch will represent 15 percent of the revenues of the bank.What is the expected return of the bank with the new branch?

Accepted Answer

A) 12.6 percent 
B) 15.4 percent 
C) 4.6 percent 
D) 7.4 percent 
E) 8.2 percent 
A) 12.6 percent 
B) 15.4 percent 
C) 4.6 percent 
D) 7.4 percent 
E) 8.2 percent

Question 7

Murphy National Bank is thinking about adding a new branch in a very different market area.It estimates that the new office will have an expected return of 16% with a standard deviation of 8%.Currently,it has an expected return of 12% with a standard deviation of 4%.The correlation between the returns on the new branch and the bank's current returns is estimated to be 0.20.The bank estimates that the new branch will represent 15 percent of the revenues of the bank.What is the bank's expected risk (measured by the standard deviation)with the new branch? Round to the nearest 0.1 percent.

Accepted Answer

A) 14.6 percent 
B) 3.8 percent 
C) 4.6 percent 
D) 7.4 percent 
E) 5.8 percent 
A) 14.6 percent 
B) 3.8 percent 
C) 4.6 percent 
D) 7.4 percent 
E) 5.8 percent

Question 8

The acronym ACH stands for _____________.

Accepted Answer

automated

Question 9

Bank branch offices are often specially configured today to maximize sales opportunities.

Accepted Answer

A) True 
 B)False

Question 10

____________________ reduces a bank's overall risk exposure by establishing service facilities in different market areas.

Accepted Answer

Geographic

Question 11

Newly designed bank branch offices in recent years have emphasized more heavily on effective communication of service options to the customers in an effort to promote service sales.

Accepted Answer

A) True 
 B)False

Question 12

One of the benefits of applying for a federal banking charter is that banks need not join the Federal Reserve System.

Accepted Answer

A) True 
 B)False

Question 13

The ______________________ can be calculated when the present value of the future net cash flows are set equal to the initial cash outflow.It is the interest rate that is actually earned on a new project.

Accepted Answer

expected r

Question 14

The optimal choice for a new branch site must be one that offers the bank the highest expected rate of return on the capital invested in the project.

Accepted Answer

A) True 
 B)False

Question 15

One of the benefits of securing a state charter instead of a federal charter for a bank is that:

Accepted Answer

A) it brings added prestige. 
B) it results in the automatic receipt of federal deposit insurance. 
C) it is often able to lend a higher percentage of its capital to a single borrower. 
D) state laws can pre-empt federal laws. 
E) None of the options are correct. 
A) it brings added prestige. 
B) it results in the automatic receipt of federal deposit insurance. 
C) it is often able to lend a higher percentage of its capital to a single borrower. 
D) state laws can pre-empt federal laws. 
E) None of the options are correct.

Question 16

Chester National Bank is considering adding a new branch bank.It knows that it will cost $2.5 million to build the branch and it believes that it will generate $214,526 per year for the next 25 years.Chester National Bank requires a return of 10% on all new projects it undertakes.What is this project's expected rate of return or internal rate of return? (Round to the nearest whole percent)

Accepted Answer

A) 0% 
B) 7% 
C) 12% 
D) 2% 
E) 25% 
A) 0% 
B) 7% 
C) 12% 
D) 2% 
E) 25%

Question 17

Which of the following is a category of authentication factors used by federal banking agencies?

Accepted Answer

A) Something a customer knows 
B) Something a customer has 
C) Something a customer is 
D) Something a customer knows,has,or is 
E) None of the options are correct 
A) Something a customer knows 
B) Something a customer has 
C) Something a customer is 
D) Something a customer knows,has,or is 
E) None of the options are correct

Question 18

Negative correlation of returns of a proposed new branch with returns of the existing branch offices and other assets can serve to lower the overall bank's riskiness and is an important justification for branch establishment.This is referred to as geographic diversification effect.

Accepted Answer

A) True 
 B)False

Question 19

U.S.banking laws require the organizers of a proposed new bank to demonstrate:

Accepted Answer

A) adequate future earnings prospects. 
B) adequate owners' capital availability. 
C) evidence of a public need for a new bank. 
D) existing banks will not be endangered. 
E) All of the options are correct. 
A) adequate future earnings prospects. 
B) adequate owners' capital availability. 
C) evidence of a public need for a new bank. 
D) existing banks will not be endangered. 
E) All of the options are correct.

Question 20

The number of bank charters issued annually in the United States averages about:

Accepted Answer

A) 1,000 
B) 2,000 
C) 10 
D) 100 
E) None of the options are correct 
A) 1,000 
B) 2,000 
C) 10 
D) 100 
E) None of the options are correct

One of the benefits for a bank securing a federal (national)charter instead of a state charter is that:

The FDIC Improvement Act of 1991 requires a bank closing one of its branches to give its customers a minimum notice of:

Depository institutions are required to get their deposits insured from the ____________.

Applying for a bank charter from the Comptroller of the Currency is simultaneously followed by an application for FDIC insurance,to expedite the formation process and save duplication of efforts.

The acronym ACH stands for _____________.

Bank branch offices are often specially configured today to maximize sales opportunities.

____________________ reduces a bank's overall risk exposure by establishing service facilities in different market areas.

Newly designed bank branch offices in recent years have emphasized more heavily on effective communication of service options to the customers in an effort to promote service sales.

One of the benefits of applying for a federal banking charter is that banks need not join the Federal Reserve System.

The ______________________ can be calculated when the present value of the future net cash flows are set equal to the initial cash outflow.It is the interest rate that is actually earned on a new project.

The optimal choice for a new branch site must be one that offers the bank the highest expected rate of return on the capital invested in the project.

One of the benefits of securing a state charter instead of a federal charter for a bank is that:

Which of the following is a category of authentication factors used by federal banking agencies?

Negative correlation of returns of a proposed new branch with returns of the existing branch offices and other assets can serve to lower the overall bank's riskiness and is an important justification for branch establishment.This is referred to as geographic diversification effect.

U.S.banking laws require the organizers of a proposed new bank to demonstrate:

The number of bank charters issued annually in the United States averages about:

An Overview of the Changing Financial-Services Sector

The Impact of Government Policy and Regulation on the Financial-Services Industry

The Organization and Structure of Banking and the Financial-Services Industry

The Financial Statements of Banks and Their Principal Competitors

Measuring and Evaluating the Performance of Banks and Their Principal Competitors

Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques

Investment Banking,Insurance,and Other Sources of Fee Income

Risk Management: Asset-Backed Securities, Loan Sales, Credit Standbys, and Credit Derivatives

The Investment Function in Financial-Services Management

Liquidity and Reserves Management: Strategies and Policies

Managing and Pricing Deposit Services

Managing Nondeposit Liabilities

Investment Banking, insurance, and Other Sources of Fee Income

The Management of Capital

Lending Policies and Procedures: Managing Credit Risk

Lending to Business Firms and Pricing Business Loans

Consumer Loans, Credit Cards, and Real Estate Lending

Acquisitions and Mergers in Financial-Services Management

International Banking and the Future of Banking and Financial Services

Filters

Exam 4: Establishing New Banks, Branches, ATMs, Telephone Services, and Websites

One of the benefits for a bank securing a federal (national)charter instead of a state charter is that:

The FDIC Improvement Act of 1991 requires a bank closing one of its branches to give its customers a minimum notice of:

Depository institutions are required to get their deposits insured from the ____________.

Applying for a bank charter from the Comptroller of the Currency is simultaneously followed by an application for FDIC insurance,to expedite the formation process and save duplication of efforts.

The acronym ACH stands for _____________.

Bank branch offices are often specially configured today to maximize sales opportunities.

____________________ reduces a bank's overall risk exposure by establishing service facilities in different market areas.

Newly designed bank branch offices in recent years have emphasized more heavily on effective communication of service options to the customers in an effort to promote service sales.

One of the benefits of applying for a federal banking charter is that banks need not join the Federal Reserve System.

The ______________________ can be calculated when the present value of the future net cash flows are set equal to the initial cash outflow.It is the interest rate that is actually earned on a new project.

The optimal choice for a new branch site must be one that offers the bank the highest expected rate of return on the capital invested in the project.

One of the benefits of securing a state charter instead of a federal charter for a bank is that:

Which of the following is a category of authentication factors used by federal banking agencies?

Negative correlation of returns of a proposed new branch with returns of the existing branch offices and other assets can serve to lower the overall bank's riskiness and is an important justification for branch establishment.This is referred to as geographic diversification effect.

U.S.banking laws require the organizers of a proposed new bank to demonstrate:

The number of bank charters issued annually in the United States averages about:

An Overview of the Changing Financial-Services Sector

The Impact of Government Policy and Regulation on the Financial-Services Industry

The Organization and Structure of Banking and the Financial-Services Industry

The Financial Statements of Banks and Their Principal Competitors

Measuring and Evaluating the Performance of Banks and Their Principal Competitors

Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques

Investment Banking,Insurance,and Other Sources of Fee Income

Risk Management: Asset-Backed Securities, Loan Sales, Credit Standbys, and Credit Derivatives

The Investment Function in Financial-Services Management

Liquidity and Reserves Management: Strategies and Policies

Managing and Pricing Deposit Services

Managing Nondeposit Liabilities

Investment Banking, insurance, and Other Sources of Fee Income

The Management of Capital

Lending Policies and Procedures: Managing Credit Risk

Lending to Business Firms and Pricing Business Loans

Consumer Loans, Credit Cards, and Real Estate Lending

Acquisitions and Mergers in Financial-Services Management

International Banking and the Future of Banking and Financial Services

Filters