Question 1

A bank that has an equity to asset ratio equal to 12 percent can normally lend no more than _________________ of its assets to any one borrower.

Accepted Answer

A) 1.20 percent 
B) 1.50 percent 
C) 1.80 percent 
D) 12.00 percent 
E) 15.00 percent 
A) 1.20 percent 
B) 1.50 percent 
C) 1.80 percent 
D) 12.00 percent 
E) 15.00 percent

Question 2

Look at the following simplified bank balance sheet. Assume that the bank has no off-balance-sheet commitments.

Accepted Answer

@#IMG-DLM& Using the three capital adequacy ratios

Question 3

Major provisions of the Financial Services Modernization Act of 1999 include all of the following except

Accepted Answer

A) allowing bank holding companies to open insurance underwriting affiliates and vice versa. 
B) allowing bank holding companies to open or merge with investment banks. 
C) creating one regulator to oversee all activities of financial service firms. 
D) all of the options are included 
A) allowing bank holding companies to open insurance underwriting affiliates and vice versa. 
B) allowing bank holding companies to open or merge with investment banks. 
C) creating one regulator to oversee all activities of financial service firms. 
D) all of the options are included

Question 4

A bank holding company that only has one bank is termed a unit bank.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would increase the value of a bank charter?
I. Tightening restrictions on new charters
II. Broadening the activities banks can engage in
III. Increasing reserve requirements
IV. Doubling capital adequacy requirements

Accepted Answer

A) I and II only 
B) II only 
C) III and IV only 
D) I and IV only 
E) II and III only 
A) I and II only 
B) II only 
C) III and IV only 
D) I and IV only 
E) II and III only

Question 6

Areas of commercial bank regulation designed to encourage banks to lend to socially important sectors such as housing and farming are termed ______________________ regulations.

Accepted Answer

A) safety and soundness 
B) consumer protection 
C) investor protection 
D) credit allocation 
E) monetary policy 
A) safety and soundness 
B) consumer protection 
C) investor protection 
D) credit allocation 
E) monetary policy

Question 7

Why have some states placed restrictions on intrastate and interstate branches?
 What historical laws gave this right to states?
 What law changed these restrictions?

Accepted Answer

States have limited branching to protect

Question 8

The term disintermediation refers to

Accepted Answer

A) the policy of not closing insolvent institutions in hopes that they can eventually turn around their performance. 
B) the withdrawal of deposits from depository institutions that are reinvested in other types of intermediaries. 
C) the policy of regulating the minimum rate of return institutions can pay on deposits. 
D) chartering restrictions that limit the ability of new banks to enter into a local market. 
E) the policy of not allowing banks to grow by creating a de novo branch outside their traditional market area. 
A) the policy of not closing insolvent institutions in hopes that they can eventually turn around their performance. 
B) the withdrawal of deposits from depository institutions that are reinvested in other types of intermediaries. 
C) the policy of regulating the minimum rate of return institutions can pay on deposits. 
D) chartering restrictions that limit the ability of new banks to enter into a local market. 
E) the policy of not allowing banks to grow by creating a de novo branch outside their traditional market area.

Question 9

The difference between the private costs of regulations and the private benefits for the producers of financial services is called the net regulatory burden.

Accepted Answer

A) True 
 B)False

Question 10

Among other things,the _____________ prohibits U.S. banks from providing banking services to foreign shell banks.

Accepted Answer

A) International Banking Act 
B) Financial Services Modernization Act 
C) USA Patriot Act 
D) Foreign Bank Supervision Enhancement Act 
E) Foreign Banking Activity Powers Enforcement Act 
A) International Banking Act 
B) Financial Services Modernization Act 
C) USA Patriot Act 
D) Foreign Bank Supervision Enhancement Act 
E) Foreign Banking Activity Powers Enforcement Act

Question 11

The quantity of notes and coin in the economy is called inside money but the bulk of the money supply is outside money.

Accepted Answer

A) True 
 B)False

Question 12

Banks are generally prohibited from making loans exceeding more than 15 percent of their own equity capital to any one company or borrower.

Accepted Answer

A) True 
 B)False

A bank that has an equity to asset ratio equal to 12 percent can normally lend no more than _________________ of its assets to any one borrower.

Look at the following simplified bank balance sheet. Assume that the bank has no off-balance-sheet commitments.

Major provisions of the Financial Services Modernization Act of 1999 include all of the following except

A bank holding company that only has one bank is termed a unit bank.

Which of the following would increase the value of a bank charter? I. Tightening restrictions on new charters II. Broadening the activities banks can engage in III. Increasing reserve requirements IV. Doubling capital adequacy requirements

Areas of commercial bank regulation designed to encourage banks to lend to socially important sectors such as housing and farming are termed ______________________ regulations.

Why have some states placed restrictions on intrastate and interstate branches? What historical laws gave this right to states? What law changed these restrictions?

The term disintermediation refers to

The difference between the private costs of regulations and the private benefits for the producers of financial services is called the net regulatory burden.

Among other things,the _____________ prohibits U.S. banks from providing banking services to foreign shell banks.

The quantity of notes and coin in the economy is called inside money but the bulk of the money supply is outside money.

Banks are generally prohibited from making loans exceeding more than 15 percent of their own equity capital to any one company or borrower.

Introduction

Determinants of Interest Rates

Interest Rates and Security Valuation

The Federal Reserve System, Monetary Policy, and Interest Rates

Money Markets

Bond Markets

Mortgage Markets

Stock Markets

Foreign Exchange Markets

Derivative Securities Markets

Commercial Banks: Industry Overview

Commercial Banks Financial Statements and Analysis

Other Lending Institutions: Savings Institutions, Credit Unions, and Finance Companies

Insurance Companies

Securities Firms and Investment Banks

Investment Companies

Pension Funds

Types of Risks Incurred by Financial Institutions

Managing Credit Risk on the Balance Sheet

Managing Liquidity Risk on the Balance Sheet

Managing Interest Rate Risk and Insolvency Risk on the Balance Sheet

Managing Risk Off the Balance Sheet With Derivative Securities

Managing Risk Off the Balance Sheet With Loan Sales and Securitization

Filters

Exam 13: Regulation of Commercial Banks

A bank that has an equity to asset ratio equal to 12 percent can normally lend no more than _________________ of its assets to any one borrower.

Look at the following simplified bank balance sheet. Assume that the bank has no off-balance-sheet commitments.

Major provisions of the Financial Services Modernization Act of 1999 include all of the following except

A bank holding company that only has one bank is termed a unit bank.

Which of the following would increase the value of a bank charter? I. Tightening restrictions on new charters II. Broadening the activities banks can engage in III. Increasing reserve requirements IV. Doubling capital adequacy requirements

Areas of commercial bank regulation designed to encourage banks to lend to socially important sectors such as housing and farming are termed ______________________ regulations.

Why have some states placed restrictions on intrastate and interstate branches? What historical laws gave this right to states? What law changed these restrictions?

The term disintermediation refers to

The difference between the private costs of regulations and the private benefits for the producers of financial services is called the net regulatory burden.

Among other things,the _____________ prohibits U.S. banks from providing banking services to foreign shell banks.

The quantity of notes and coin in the economy is called inside money but the bulk of the money supply is outside money.

Banks are generally prohibited from making loans exceeding more than 15 percent of their own equity capital to any one company or borrower.

Introduction

Determinants of Interest Rates

Interest Rates and Security Valuation

The Federal Reserve System, Monetary Policy, and Interest Rates

Money Markets

Bond Markets

Mortgage Markets

Stock Markets

Foreign Exchange Markets

Derivative Securities Markets

Commercial Banks: Industry Overview

Commercial Banks Financial Statements and Analysis

Other Lending Institutions: Savings Institutions, Credit Unions, and Finance Companies

Insurance Companies

Securities Firms and Investment Banks

Investment Companies

Pension Funds

Types of Risks Incurred by Financial Institutions

Managing Credit Risk on the Balance Sheet

Managing Liquidity Risk on the Balance Sheet

Managing Interest Rate Risk and Insolvency Risk on the Balance Sheet

Managing Risk Off the Balance Sheet With Derivative Securities

Managing Risk Off the Balance Sheet With Loan Sales and Securitization

Filters