Exam 2: Financial Services: Depository Institutions

The asset transformation function of FIs typically involves

A significant recent trend in the provision of financial services is that households increasingly prefer denomination intermediation and information services provided by

Small banks make proportionately larger amounts of real estate loans than large banks.

Depository institutions serve as the primary conduit through which monetary policy actions impact the economy.

Money market mutual funds have attracted large amounts of retail savings and retail time deposits from commercial banks in recent years.

The ability of diversification to eliminate much of the risk from the asset side of the balance sheet of an FI is the result of choosing assets that are less than perfectly positively correlated.

The growth of the commercial paper market has led to a decline in the demand for business loans from commercial banks.

Currently,federal standards do not allow investment banks to convert to a bank holding company structure.

Advantages of depositing funds into a typical bank account instead of directly buying corporate securities include all of the following EXCEPT

Commercial banks have limited power to underwrite corporate securities since 1987.

For the following problems, choose among the following major banking laws. -This legislation streamlined bank holding company supervision,with the Federal Reserve as the umbrella holding company supervisor.

Lehman Brothers failed during the recent financial crisis despite having access to the low cost sources of funds offered by the Federal Reserve.

Which of the following is the most important source of funds for savings institutions?

The use of off-balance-sheet activities allows banks to practice regulatory tax-avoidance.

The largest liability on credit unions' combined balance sheet as of June 30,2015 was

Which of the following refers to the possibility that a firm's owners or managers will take actions contrary to the promises contained in the covenants of the securities the firm issues to raise funds?

Since 1990,commercial banks decreased the proportion of business loans and increased the proportion of mortgages in their portfolios.

According to the American Bankers Association,the tax-exempt status of credit unions is the equivalent of a $1 billion per-year subsidy to the industry.

For the following problems, choose among the following major banking laws. -This law allows bank holding companies to convert out-of-state subsidiary banks into branches of a single interstate bank.

For the following problems, choose among the following major banking laws. -This legislation limited interstate branching.