Question 1

Choose among the following major banking laws.
-This legislation permits bank holding companies to acquire banks in other states.

Accepted Answer

A) The McFadden Act of 1927 
B) The Glass-Steagall Act of 1933 
C) The Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  of 1980 
D) The Garn-St Germain Depository Institutions Act of 1982 
E) The Competitive Equality in Banking Act of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
G)The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991
H)The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
I)Financial Services Modernization Act of 1999 
A) The McFadden Act of 1927 
B) The Glass-Steagall Act of 1933 
C) The Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  of 1980 
D) The Garn-St Germain Depository Institutions Act of 1982 
E) The Competitive Equality in Banking Act of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
G)The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991
H)The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
I)Financial Services Modernization Act of 1999

Question 2

Correspondent banking may involve

Accepted Answer

A) providing banking services to other banks facing shortage of staff. 
B) providing foreign exchange trading services to individuals. 
C) holding and managing assets for individuals or corporations. 
D) acting as transfer and disbursement agents for pension funds. 
E) providing hedging services to corporations. 
A) providing banking services to other banks facing shortage of staff. 
B) providing foreign exchange trading services to individuals. 
C) holding and managing assets for individuals or corporations. 
D) acting as transfer and disbursement agents for pension funds. 
E) providing hedging services to corporations.

Question 3

Choose among the following major banking laws.
-This legislation limited interstate branching.

Accepted Answer

A) The McFadden Act of 1927 
B) The Glass-Steagall Act of 1933 
C) The Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  of 1980 
D) The Garn-St Germain Depository Institutions Act of 1982 
E) The Competitive Equality in Banking Act of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
G)The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991
H)The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
I)Financial Services Modernization Act of 1999 
A) The McFadden Act of 1927 
B) The Glass-Steagall Act of 1933 
C) The Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  of 1980 
D) The Garn-St Germain Depository Institutions Act of 1982 
E) The Competitive Equality in Banking Act of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
G)The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991
H)The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
I)Financial Services Modernization Act of 1999

Question 4

A large number of the savings institution failures during the in the 1980s was a result of

Accepted Answer

A) interest rate risk exposure. 
B) excessively risky investments. 
C) fraudulent behavior on the part of managers. 
D) All of the above. 
E) answers B and C only. 
A) interest rate risk exposure. 
B) excessively risky investments. 
C) fraudulent behavior on the part of managers. 
D) All of the above. 
E) answers B and C only.

Question 5

The DIDMCA of 1980 and the DIA of 1982 were the initial acts to begin the deregulation of the commercial banking industry.

Accepted Answer

A) True 
 B)False

Question 6

The maturity structure of the assets of commercial banks tends to be shorter than the maturity structure of liabilities.

Accepted Answer

A) True 
 B)False

Question 7

All credit unions are nationally chartered and regulated by the National Credit Union Administration.

Accepted Answer

A) True 
 B)False

Question 8

As of December 2012, the number of nationally chartered banks was greater than the number of state chartered banks.

Accepted Answer

A) True 
 B)False

Question 9

What was the primary objective of the Bank Holding Company Act of 1956?

Accepted Answer

A) Permitted bank holding companies to acquire banks in other states. 
B) Restricted the banking and nonbanking acquisition activities of multibank holding companies. 
C) Regulated foreign bank branches and agencies in the United States. 
D) Bank holding companies were permitted to convert out-of-state subsidiary banks into branches of a single interstate bank. 
E) Allowed for the creation of a financial services holding company. 
A) Permitted bank holding companies to acquire banks in other states. 
B) Restricted the banking and nonbanking acquisition activities of multibank holding companies. 
C) Regulated foreign bank branches and agencies in the United States. 
D) Bank holding companies were permitted to convert out-of-state subsidiary banks into branches of a single interstate bank. 
E) Allowed for the creation of a financial services holding company.

Question 10

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

Accepted Answer

A) The McFadden Act of 1927 
B) The Glass-Steagall Act of 1933 
C) The Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  of 1980 
D) The Garn-St Germain Depository Institutions Act of 1982 
E) The Competitive Equality in Banking Act of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
G)The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991
H)The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
I)Financial Services Modernization Act of 1999 
A) The McFadden Act of 1927 
B) The Glass-Steagall Act of 1933 
C) The Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  of 1980 
D) The Garn-St Germain Depository Institutions Act of 1982 
E) The Competitive Equality in Banking Act of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
G)The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991
H)The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
I)Financial Services Modernization Act of 1999

Question 11

Which of the following dominates the loan portfolios of banks with assets less than one billion dollars?

Accepted Answer

A) Commercial loans. 
B) Consumer loans. 
C) Real estate loans. 
D) Credit card debt. 
E) Industrial loans. 
A) Commercial loans. 
B) Consumer loans. 
C) Real estate loans. 
D) Credit card debt. 
E) Industrial loans.

Question 12

Choose among the following major banking laws.
-Eliminated restrictions on banks, insurance companies, and securities firms from entering into each other's areas of business.

Accepted Answer

A) The McFadden Act of 1927 
B) The Glass-Steagall Act of 1933 
C) The Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  of 1980 
D) The Garn-St Germain Depository Institutions Act of 1982 
E) The Competitive Equality in Banking Act of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
G)The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991
H)The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
I)Financial Services Modernization Act of 1999 
A) The McFadden Act of 1927 
B) The Glass-Steagall Act of 1933 
C) The Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  of 1980 
D) The Garn-St Germain Depository Institutions Act of 1982 
E) The Competitive Equality in Banking Act of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
G)The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991
H)The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
I)Financial Services Modernization Act of 1999

Question 13

The qualified thrift lender test is designed to ensure that

Accepted Answer

A) a floor is set for the mortgage related assets held by savings institutions. 
B) a ceiling is set on the mortgage related assets held by commercial banks. 
C) savings associations are covered by risk-based deposit insurance premiums. 
D) an interest rate ceiling is imposed on small savings and time deposits at savings institutions. 
E) regulators could close thrifts and banks faster. 
A) a floor is set for the mortgage related assets held by savings institutions. 
B) a ceiling is set on the mortgage related assets held by commercial banks. 
C) savings associations are covered by risk-based deposit insurance premiums. 
D) an interest rate ceiling is imposed on small savings and time deposits at savings institutions. 
E) regulators could close thrifts and banks faster.

Question 14

Large money center banks finance most of their activities by using retail consumer deposits as the primary source of funds.

Accepted Answer

A) True 
 B)False

Question 15

State-chartered commercial banks may be regulated by

Accepted Answer

A) the FDIC only. 
B) the FDIC and the Federal Reserve System. 
C) the Federal Reserve System only. 
D) the FDIC, the Federal Reserve System, and the Comptroller of the Currency. 
E) the FDIC, the Federal Reserve System, the Comptroller of the Currency, and state banking commissions. 
A) the FDIC only. 
B) the FDIC and the Federal Reserve System. 
C) the Federal Reserve System only. 
D) the FDIC, the Federal Reserve System, and the Comptroller of the Currency. 
E) the FDIC, the Federal Reserve System, the Comptroller of the Currency, and state banking commissions.

Question 16

Regulator forbearance is a policy of allowing economically insolvent FIs to continue in operation.

Accepted Answer

A) True 
 B)False

Question 17

The savings association industry continues to be the primary lender of residential mortgages.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following FIs does not currently provide a payment function for their customers?

Accepted Answer

A) Depository institutions. 
B) Insurance companies. 
C) Finance companies. 
D) Pension funds. 
E) Mutual funds. 
A) Depository institutions. 
B) Insurance companies. 
C) Finance companies. 
D) Pension funds. 
E) Mutual funds.

Question 19

All commercial banks must be members of the Federal Reserve System.

Accepted Answer

A) True 
 B)False

Question 20

Choose among the following major banking laws.
-This legislation introduced money market deposit accounts.

Accepted Answer

A) The McFadden Act of 1927 
B) The Glass-Steagall Act of 1933 
C) The Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  of 1980 
D) The Garn-St Germain Depository Institutions Act of 1982 
E) The Competitive Equality in Banking Act of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
G)The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991
H)The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
I)Financial Services Modernization Act of 1999 
A) The McFadden Act of 1927 
B) The Glass-Steagall Act of 1933 
C) The Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  of 1980 
D) The Garn-St Germain Depository Institutions Act of 1982 
E) The Competitive Equality in Banking Act of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
G)The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991
H)The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
I)Financial Services Modernization Act of 1999

Exam 2: Financial Services: Depository Institutions

Choose among the following major banking laws. -This legislation permits bank holding companies to acquire banks in other states.

Correspondent banking may involve

Choose among the following major banking laws. -This legislation limited interstate branching.

A large number of the savings institution failures during the in the 1980s was a result of

The DIDMCA of 1980 and the DIA of 1982 were the initial acts to begin the deregulation of the commercial banking industry.

The maturity structure of the assets of commercial banks tends to be shorter than the maturity structure of liabilities.

All credit unions are nationally chartered and regulated by the National Credit Union Administration.

As of December 2012, the number of nationally chartered banks was greater than the number of state chartered banks.

What was the primary objective of the Bank Holding Company Act of 1956?

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

Which of the following dominates the loan portfolios of banks with assets less than one billion dollars?

Choose among the following major banking laws. -Eliminated restrictions on banks, insurance companies, and securities firms from entering into each other's areas of business.

The qualified thrift lender test is designed to ensure that

Large money center banks finance most of their activities by using retail consumer deposits as the primary source of funds.

State-chartered commercial banks may be regulated by

Regulator forbearance is a policy of allowing economically insolvent FIs to continue in operation.

The savings association industry continues to be the primary lender of residential mortgages.

Which of the following FIs does not currently provide a payment function for their customers?

All commercial banks must be members of the Federal Reserve System.

Choose among the following major banking laws. -This legislation introduced money market deposit accounts.

Why Are Financial Institutions Special

Financial Services: Finance Companies

Financial Services: Securities Brokerage and Investment Banking

Financial Services: Mutual Funds and Hedge Funds

Financial Services: Insurance

Risks of Financial Institutions

Interest Rate Risk I

Interest Rate Risk II

Credit Risk: Individual Loan Risk

Credit Risk: Loan Portfolio and Concentration Risk

Liquidity Risk

Foreign Exchange Risk

Sovereign Risk

Market Risk

Off-Balance-Sheet Risk

Technology and Other Operational Risks

Liability and Liquidity Management

Deposit Insurance and Other Liability Guarantees

Capital Adequacy

Product and Geographic Expansion

Futures and Forwards

Options, Caps, Floors, and Collars

Swaps

Loan Sales

Securitization

Filters