Question 1

Describe Edge Act corporations,international banking facilities,and the structure of foreign banks in the United States.

Accepted Answer

Edge Act corporations are special types

Question 2

What is the key difference between an S&L and a mutual savings bank?

Accepted Answer

A)  Mutual savings banks are jointly owned by depositors, whereas S&Ls aren't. 
B)  The FDIC insures an S&L's deposits, but not those of mutual savings banks. 
C)  Both A and B are correct. 
D)  Neither A nor B is correct. 
A)  Mutual savings banks are jointly owned by depositors, whereas S&Ls aren't. 
B)  The FDIC insures an S&L's deposits, but not those of mutual savings banks. 
C)  Both A and B are correct. 
D)  Neither A nor B is correct.

Question 3

The driving force behind the securitization of mortgages and automobile loans has been

Accepted Answer

A)  the rising regulatory constraints on substitute financial instruments. 
B)  the desire of mortgage and auto lenders to exit this field of lending. 
C)  the improvement in computer technology. 
D)  the relaxation of regulatory restrictions on credit card operations. 
A)  the rising regulatory constraints on substitute financial instruments. 
B)  the desire of mortgage and auto lenders to exit this field of lending. 
C)  the improvement in computer technology. 
D)  the relaxation of regulatory restrictions on credit card operations.

Question 4

The legislation that effectively prohibited banks from branching across state lines and forced all national banks to conform to the branching regulations of the state in which they reside is the

Accepted Answer

A)  McFadden Act. 
B)  National Banking Act. 
C)  Glass-Steagall Act. 
D)  Garn-St. Germain Act. 
A)  McFadden Act. 
B)  National Banking Act. 
C)  Glass-Steagall Act. 
D)  Garn-St. Germain Act.

Question 5

U.S.banks have most of their foreign branches in

Accepted Answer

A)  Latin America, the Far East, the Caribbean, and London. 
B)  Latin America, the Middle East, the Caribbean, and London. 
C)  Mexico, the Middle East, the Caribbean, and London. 
D)  South America, the Middle East, the Caribbean, and Canada. 
A)  Latin America, the Far East, the Caribbean, and London. 
B)  Latin America, the Middle East, the Caribbean, and London. 
C)  Mexico, the Middle East, the Caribbean, and London. 
D)  South America, the Middle East, the Caribbean, and Canada.

Question 6

The bundling of mortgages into a saleable security (usually for large institutional investors)is called ________.

Accepted Answer

A)  disintermediation 
B)  quasi-intermediation 
C)  futures bundling 
D)  hedge optioning 
E)  securitization 
A)  disintermediation 
B)  quasi-intermediation 
C)  futures bundling 
D)  hedge optioning 
E)  securitization

Question 7

The regulatory system that has evolved in the United States whereby banks are regulated at the state level,the national level,or both,is known as a

Accepted Answer

A)  bilateral regulatory system. 
B)  tiered regulatory system. 
C)  two-tiered regulatory system. 
D)  dual banking system. 
A)  bilateral regulatory system. 
B)  tiered regulatory system. 
C)  two-tiered regulatory system. 
D)  dual banking system.

Question 8

Explain what happened to the large,free-standing investment banks as a result of the Global Financial Crisis.

Accepted Answer

As a Result of the Global Financial Cris

Question 9

Since 1974,commercial banks' importance as a source of funds for borrowers has shrunk dramatically,from around ________ percent of total credit advanced to near ________ percent by 2012.

Accepted Answer

A)  60; 30 
B)  40; 22 
C)  25; 20 
D)  30; 15 
A)  60; 30 
B)  40; 22 
C)  25; 20 
D)  30; 15

Question 10

Credit cards date back to

Accepted Answer

A)  prior to World War II. 
B)  just after World War II. 
C)  the early 1950s. 
D)  the late 1950s. 
A)  prior to World War II. 
B)  just after World War II. 
C)  the early 1950s. 
D)  the late 1950s.

Question 11

The most important source of the changes in supply conditions that stimulate financial innovation has been the

Accepted Answer

A)  aging of the baby-boomer generation. 
B)  dramatic increase in the volatility of interest rates. 
C)  improvement in information technology. 
D)  dramatic increase in competition from foreign banks. 
E)  deregulation of financial institutions. 
A)  aging of the baby-boomer generation. 
B)  dramatic increase in the volatility of interest rates. 
C)  improvement in information technology. 
D)  dramatic increase in competition from foreign banks. 
E)  deregulation of financial institutions.

Question 12

Eurodollars are

Accepted Answer

A)  dollar-denominated deposits held in banks outside the United States. 
B)  deposits held by U.S. banks in Europe. 
C)  deposits held by U.S. banks in foreign countries. 
D)  dollar-denominated deposits held in U.S. banks by Europeans. 
A)  dollar-denominated deposits held in banks outside the United States. 
B)  deposits held by U.S. banks in Europe. 
C)  deposits held by U.S. banks in foreign countries. 
D)  dollar-denominated deposits held in U.S. banks by Europeans.

Question 13

Investment banking activities of the commercial banks were blamed for many bank failures.This led to

Accepted Answer

A)  the passage of the National Bank Charter Amendments Act of 1918. 
B)  the passage of the Garn-St. Germain Act of 1982. 
C)  the passage of the National Bank Act of 1863. 
D)  the passage of the Glass-Steagall Act of 1933. 
E)  the establishment of the Federal Deposit Insurance Corporation in 1933. 
A)  the passage of the National Bank Charter Amendments Act of 1918. 
B)  the passage of the Garn-St. Germain Act of 1982. 
C)  the passage of the National Bank Act of 1863. 
D)  the passage of the Glass-Steagall Act of 1933. 
E)  the establishment of the Federal Deposit Insurance Corporation in 1933.

Question 14

With the creation of the Federal Deposit Insurance Corporation,

Accepted Answer

A)  member banks of the Federal Reserve System were given the option to purchase FDIC insurance for their depositors, while nonmember commercial banks were required to buy deposit insurance. 
B)  member banks of the Federal Reserve System were required to purchase FDIC insurance for their depositors, while nonmember commercial banks could choose to buy deposit insurance. 
C)  both member and nonmember banks of the Federal Reserve System were required to purchase FDIC insurance for their depositors. 
D)  both member and nonmember banks of the Federal Reserve System could choose, but were not required, to purchase FDIC insurance for their depositors. 
A)  member banks of the Federal Reserve System were given the option to purchase FDIC insurance for their depositors, while nonmember commercial banks were required to buy deposit insurance. 
B)  member banks of the Federal Reserve System were required to purchase FDIC insurance for their depositors, while nonmember commercial banks could choose to buy deposit insurance. 
C)  both member and nonmember banks of the Federal Reserve System were required to purchase FDIC insurance for their depositors. 
D)  both member and nonmember banks of the Federal Reserve System could choose, but were not required, to purchase FDIC insurance for their depositors.

Question 15

Which regulatory body charters national banks?

Accepted Answer

A)  The Federal Reserve 
B)  The Federal Deposit Insurance Corporation 
C)  The Comptroller of the Currency 
D)  None of the above 
A)  The Federal Reserve 
B)  The Federal Deposit Insurance Corporation 
C)  The Comptroller of the Currency 
D)  None of the above

Question 16

What new forms of making payments have been spawned by the advances in information technology of the past two decades? Is it likely that ours will become a cashless society anytime soon as a result of these innovations? Why?

Accepted Answer

The advances in information technology o

Question 17

A special subsidiary of a U.S.bank that is engaged in international banking is called

Accepted Answer

A)  an international banking facility. 
B)  an agency office. 
C)  an Edge Act corporation. 
D)  a foreign bank subsidiary. 
A)  an international banking facility. 
B)  an agency office. 
C)  an Edge Act corporation. 
D)  a foreign bank subsidiary.

Question 18

Today,the United States has a dual banking system in which banks supervised by the federal government and banks supervised by the states operate side by side.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements concerning bank regulation in the United States are true?

Accepted Answer

A)  The Office of the Comptroller of the Currency has the primary responsibility for state banks that are members of the Federal Reserve System. 
B)  The Federal Reserve and the state banking authorities jointly have responsibility for state banks that are members of the Federal Reserve System. 
C)  The Office of the Comptroller of the Currency has sole regulatory responsibility over bank holding companies. 
D)  All of the above are true. 
E)  Only A and B of the above are true. 
A)  The Office of the Comptroller of the Currency has the primary responsibility for state banks that are members of the Federal Reserve System. 
B)  The Federal Reserve and the state banking authorities jointly have responsibility for state banks that are members of the Federal Reserve System. 
C)  The Office of the Comptroller of the Currency has sole regulatory responsibility over bank holding companies. 
D)  All of the above are true. 
E)  Only A and B of the above are true.

Question 20

Which of the following are important factors in determining the degree and timing of financial innovation?

Accepted Answer

A)  Changes in technology 
B)  Changes in financial market conditions 
C)  Changes in regulation 
D)  All of the above 
E)  Only A and B of the above 
A)  Changes in technology 
B)  Changes in financial market conditions 
C)  Changes in regulation 
D)  All of the above 
E)  Only A and B of the above

Exam 19: Banking Industry: Structure and Competition

Describe Edge Act corporations,international banking facilities,and the structure of foreign banks in the United States.

What is the key difference between an S&L and a mutual savings bank?

The driving force behind the securitization of mortgages and automobile loans has been

The legislation that effectively prohibited banks from branching across state lines and forced all national banks to conform to the branching regulations of the state in which they reside is the

U.S.banks have most of their foreign branches in

The bundling of mortgages into a saleable security (usually for large institutional investors)is called ________.

The regulatory system that has evolved in the United States whereby banks are regulated at the state level,the national level,or both,is known as a

Explain what happened to the large,free-standing investment banks as a result of the Global Financial Crisis.

Since 1974,commercial banks' importance as a source of funds for borrowers has shrunk dramatically,from around ________ percent of total credit advanced to near ________ percent by 2012.

Credit cards date back to

The most important source of the changes in supply conditions that stimulate financial innovation has been the

Eurodollars are

Investment banking activities of the commercial banks were blamed for many bank failures.This led to

With the creation of the Federal Deposit Insurance Corporation,

Which regulatory body charters national banks?

What new forms of making payments have been spawned by the advances in information technology of the past two decades? Is it likely that ours will become a cashless society anytime soon as a result of these innovations? Why?

A special subsidiary of a U.S.bank that is engaged in international banking is called

Today,the United States has a dual banking system in which banks supervised by the federal government and banks supervised by the states operate side by side.

Which of the following statements concerning bank regulation in the United States are true?

Which of the following are important factors in determining the degree and timing of financial innovation?

Why Study Financial Markets and Institutions?

Overview of the Financial System

What Do Interest Rates Mean and What Is Their Role in Valuation?

Why Do Interest Rates Change?

How Do Risk and Term Structure Affect Interest Rates?

Are Financial Markets Efficient?

Why Do Financial Institutions Exist?

Why Do Financial Crises Occur and

Central Banks and the Federal Reserve System

Conduct of Monetary Policy: Tools, Goals, Strategy, and Tactics

The Money Markets

The Bond Market

The Stock Market

The Mortgage Markets

The Foreign Exchange Market

The International Financial System

Banking and the Management of Financial Institutions

Financial Regulation

The Mutual Fund Industry

Insurance Companies and Pension Funds

Investment Banks, Security Brokers and Dealers, and Venture Capital Firms

Risk Management in Financial Institutions

Hedging with Financial Derivatives

Financial Crises In Emerging Market Economies

Savings Associations and Credit Unions

Finance Companies

Filters

Since 1974,commercial banks' importance as a source of funds for borrowers has shrunk dramatically,from around percent of total credit advanced to near percent by 2012.