Question 1

The function of the capital accounts of a commercial bank is to:

Accepted Answer

A) meet bank reserve requirements 
B) provide funds for real estate loans 
C) provide a cushion for possible bank losses 
D) support the purchase of bank buildings and equipment 
A) meet bank reserve requirements 
B) provide funds for real estate loans 
C) provide a cushion for possible bank losses 
D) support the purchase of bank buildings and equipment

Question 2

_______________ are non-commercial bank depository institutions that include savings banks and credit unions, which accumulate individual savings and lend primarily to other individuals.

Accepted Answer

A) Banks 
B) Securities firms 
C) Pension funds 
D) Finance companies 
E) none of the above 
A) Banks 
B) Securities firms 
C) Pension funds 
D) Finance companies 
E) none of the above

Question 3

NOW accounts:

Accepted Answer

A) are not subject to ceiling rates under Regulation Q 
B) enable depository institutions to compete effectively for funds that were flowing in large amounts to nonblank money market funds 
C) typically pay interest rates equal to that paid by money market funds 
D) all the above 
A) are not subject to ceiling rates under Regulation Q 
B) enable depository institutions to compete effectively for funds that were flowing in large amounts to nonblank money market funds 
C) typically pay interest rates equal to that paid by money market funds 
D) all the above

Question 4

Which of the following statements is false?

Accepted Answer

A) It is not possible for a bank to invest all of its funds in profitable loans or securities. 
B) All states now permit statewide branch banking. 
C) Regulation Q established interest rate ceilings on time and savings deposits. 
D) The depositors of a bank are creditors and hence have a claim that is superior to that of stockholders in the event of liquidation. 
A) It is not possible for a bank to invest all of its funds in profitable loans or securities. 
B) All states now permit statewide branch banking. 
C) Regulation Q established interest rate ceilings on time and savings deposits. 
D) The depositors of a bank are creditors and hence have a claim that is superior to that of stockholders in the event of liquidation.

Question 5

Financial institutions include:

Accepted Answer

A) banks 
B) pension funds 
C) insurance companies 
D) all of the above 
A) banks 
B) pension funds 
C) insurance companies 
D) all of the above

Question 6

Insurance companies receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.

Accepted Answer

A) True 
 B)False

Question 7

Savings banks have nearly three quarters of their assets in the form of:

Accepted Answer

A) securities 
B) cash 
C) unsecured loans 
D) real estate mortgages and mortgage-backed securities 
A) securities 
B) cash 
C) unsecured loans 
D) real estate mortgages and mortgage-backed securities

Question 8

Our system of national banks:

Accepted Answer

A) was designed to destroy state banking 
B) was an integral part of the Federal Reserve Act 
C) was replaced by Federal Reserve banking 
D) came into existence during the Civil War 
A) was designed to destroy state banking 
B) was an integral part of the Federal Reserve Act 
C) was replaced by Federal Reserve banking 
D) came into existence during the Civil War

Question 9

The notes of the Bank of North America

Accepted Answer

A) served as a circulating medium of exchange 
B) loaned liberally to the government 
C) were redeemed in metallic coins upon demand 
D) all the above 
E) none of the above 
A) served as a circulating medium of exchange 
B) loaned liberally to the government 
C) were redeemed in metallic coins upon demand 
D) all the above 
E) none of the above

Question 10

_______________ are non-commercial bank depository institutions that include savings banks and credit unions, which accumulate individual savings and lend primarily to other individuals.

Accepted Answer

A) Thrift institutions 
B) Securities firms 
C) Pension funds 
D) Finance firms 
E) none of the above 
A) Thrift institutions 
B) Securities firms 
C) Pension funds 
D) Finance firms 
E) none of the above

Question 11

_______________ are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit, including the financing of automobiles and the purchase of homes, and derive their funds almost entirely from the savings of their members.

Accepted Answer

A) Commercial banks 
B) Thrift institutions 
C) Savings banks 
D) Brokerage firms 
E) none of the above 
A) Commercial banks 
B) Thrift institutions 
C) Savings banks 
D) Brokerage firms 
E) none of the above

Question 12

The First Bank of the United States ceased operations because:

Accepted Answer

A) it was superseded by the Second Bank of the United States 
B) of the opposition of state banking interests 
C) its charter had expired and there was no provision for its renewal 
D) the need to provide financing for the Civil War was not supported by Congress 
A) it was superseded by the Second Bank of the United States 
B) of the opposition of state banking interests 
C) its charter had expired and there was no provision for its renewal 
D) the need to provide financing for the Civil War was not supported by Congress

Question 13

Major types of financial institutions in the U.S.include commercial banks, mutual funds, insurance companies, and pension funds.

Accepted Answer

A) True 
 B)False

Question 14

The interest rate charged by banks for short-term unsecured loans to their highest quality business customers is referred to as the:

Accepted Answer

A) discount rate 
B) federal fund rate 
C) prime rate 
D) all the above 
A) discount rate 
B) federal fund rate 
C) prime rate 
D) all the above

Question 15

The process of ______________ which is the process of pooling and packaging mortgage loans into debt securities resulted in the creation of ______________.

Accepted Answer

A) securitization, pooled asset loans 
B) portfolio composition, mortgage backed securities 
C) issuing mortgage backed securities, securitization 
D) securitization, mortgage backed securities 
E) none of the above 
A) securitization, pooled asset loans 
B) portfolio composition, mortgage backed securities 
C) issuing mortgage backed securities, securitization 
D) securitization, mortgage backed securities 
E) none of the above

Question 16

_______________ accept the savings of individuals and lend pooled savings to individuals primarily in the form of mortgage loans and operate almost entirely in New England , New York, and New Jersey, with most of their assets continuing to be invested in mortgage loans.

Accepted Answer

A) Commercial banks 
B) Thrift institutions 
C) Savings banks 
D) Credit unions 
E) none of the above 
A) Commercial banks 
B) Thrift institutions 
C) Savings banks 
D) Credit unions 
E) none of the above

Question 17

International banking exists when banks operate in more than one country.

Accepted Answer

A) True 
 B)False

Question 18

Investment banking firms sell shares in their firms to individuals and invest the pooled proceeds in corporate and government securities.

Accepted Answer

A) True 
 B)False

Question 19

_______________ are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit, including the financing of automobiles and the purchase of homes, and derive their funds almost entirely from the savings of their members.

Accepted Answer

A) Commercial banks 
B) Thrift institutions 
C) Savings banks 
D) Credit unions 
E) none of the above 
A) Commercial banks 
B) Thrift institutions 
C) Savings banks 
D) Credit unions 
E) none of the above

Question 20

Unit banking means:

Accepted Answer

A) a bank may have only one full-service office 
B) the bank is owned by a unit trust 
C) all branch offices are controlled by a central unit 
D) none of the above 
A) a bank may have only one full-service office 
B) the bank is owned by a unit trust 
C) all branch offices are controlled by a central unit 
D) none of the above

The function of the capital accounts of a commercial bank is to:

_______________ are non-commercial bank depository institutions that include savings banks and credit unions, which accumulate individual savings and lend primarily to other individuals.

NOW accounts:

Which of the following statements is false?

Financial institutions include:

Insurance companies receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.

Savings banks have nearly three quarters of their assets in the form of:

Our system of national banks:

The notes of the Bank of North America

_______________ are non-commercial bank depository institutions that include savings banks and credit unions, which accumulate individual savings and lend primarily to other individuals.

_______________ are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit, including the financing of automobiles and the purchase of homes, and derive their funds almost entirely from the savings of their members.

The First Bank of the United States ceased operations because:

Major types of financial institutions in the U.S.include commercial banks, mutual funds, insurance companies, and pension funds.

The interest rate charged by banks for short-term unsecured loans to their highest quality business customers is referred to as the:

The process of which is the process of pooling and packaging mortgage loans into debt securities resulted in the creation of .

_______________ accept the savings of individuals and lend pooled savings to individuals primarily in the form of mortgage loans and operate almost entirely in New England , New York, and New Jersey, with most of their assets continuing to be invested in mortgage loans.

International banking exists when banks operate in more than one country.

Investment banking firms sell shares in their firms to individuals and invest the pooled proceeds in corporate and government securities.

_______________ are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit, including the financing of automobiles and the purchase of homes, and derive their funds almost entirely from the savings of their members.

Unit banking means:

The Financial Environment

Money and the Monetary System

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 3: Banks and Other Financial Institutions

The function of the capital accounts of a commercial bank is to:

_______________ are non-commercial bank depository institutions that include savings banks and credit unions, which accumulate individual savings and lend primarily to other individuals.

NOW accounts:

Which of the following statements is false?

Financial institutions include:

Insurance companies receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.

Savings banks have nearly three quarters of their assets in the form of:

Our system of national banks:

The notes of the Bank of North America

_______________ are non-commercial bank depository institutions that include savings banks and credit unions, which accumulate individual savings and lend primarily to other individuals.

_______________ are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit, including the financing of automobiles and the purchase of homes, and derive their funds almost entirely from the savings of their members.

The First Bank of the United States ceased operations because:

Major types of financial institutions in the U.S.include commercial banks, mutual funds, insurance companies, and pension funds.

The interest rate charged by banks for short-term unsecured loans to their highest quality business customers is referred to as the:

The process of ______________ which is the process of pooling and packaging mortgage loans into debt securities resulted in the creation of ______________.

_______________ accept the savings of individuals and lend pooled savings to individuals primarily in the form of mortgage loans and operate almost entirely in New England , New York, and New Jersey, with most of their assets continuing to be invested in mortgage loans.

International banking exists when banks operate in more than one country.

Investment banking firms sell shares in their firms to individuals and invest the pooled proceeds in corporate and government securities.

_______________ are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit, including the financing of automobiles and the purchase of homes, and derive their funds almost entirely from the savings of their members.

Unit banking means:

The Financial Environment

Money and the Monetary System

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

The process of which is the process of pooling and packaging mortgage loans into debt securities resulted in the creation of .