Question 1

The adequacy of capital for commercial banks as measured by regulatory authorities is:

Accepted Answer

A) a composite of various asset risk categories 
B) a measure of investment success 
C) based on the total amount of deposits of a bank 
D) based on the ratio of federal government obligations to deposits 
A) a composite of various asset risk categories 
B) a measure of investment success 
C) based on the total amount of deposits of a bank 
D) based on the ratio of federal government obligations to deposits

Question 2

The National Banking Act of 1864:

Accepted Answer

A) established minimum capital requirements for federally chartered banks 
B) regulated loans with respect to safety and liquidity 
C) established minimum reserve requirements 
D) all of the above 
A) established minimum capital requirements for federally chartered banks 
B) regulated loans with respect to safety and liquidity 
C) established minimum reserve requirements 
D) all of the above

Question 3

In 1989, the Financial Institution Reform, Recovery and Enforcement Act provided for all but which of the following?

Accepted Answer

A) strengthening the federal deposit insurance programs 
B) the creation of the Resolution Trust Corporation 
C) enhanced enforcing powers 
D) stronger capital standards for thrift institutions 
A) strengthening the federal deposit insurance programs 
B) the creation of the Resolution Trust Corporation 
C) enhanced enforcing powers 
D) stronger capital standards for thrift institutions

Question 4

Investment companies (mutual funds), investment banking firms, and brokerage firms are the primary types of ____________.

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 5

The Monetary Control Act:

Accepted Answer

A) extended the Fed's control to thrift institutions and non-member commercial banks 
B) has resulted in more competition among depository institutions 
C) increased federal deposit insurance from $40,000 to $80,000 for each account 
D) established minimum capital requirements for banks with federal charters 
A) extended the Fed's control to thrift institutions and non-member commercial banks 
B) has resulted in more competition among depository institutions 
C) increased federal deposit insurance from $40,000 to $80,000 for each account 
D) established minimum capital requirements for banks with federal charters

Question 6

The _______________________ was designed mainly to assist the savings and loan industry.

Accepted Answer

A) Glass Steagall Act 
B) Gramm-Leach-Bliley Act 
C) Garn-Saint Germain Act 
D) Depository Institutions Deregulation and Monetary Control Act 
A) Glass Steagall Act 
B) Gramm-Leach-Bliley Act 
C) Garn-Saint Germain Act 
D) Depository Institutions Deregulation and Monetary Control Act

Question 7

The Resolution Trust Corporation was brought into existence to:

Accepted Answer

A) help savings and loan institutions invest funds in a wide range of higher yielding instruments 
B) authorize savings and loan institutions to issue a new money market account with no regulated interest rate ceiling 
C) take over and liquidate the assets of failed savings and loan institutions 
D) all the above 
A) help savings and loan institutions invest funds in a wide range of higher yielding instruments 
B) authorize savings and loan institutions to issue a new money market account with no regulated interest rate ceiling 
C) take over and liquidate the assets of failed savings and loan institutions 
D) all the above

Question 8

The structure of the modern banking system includes commercial banks, savings and loans, mutual savings banks, and credit unions.

Accepted Answer

A) True 
 B)False

Question 9

Commercial banks provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes.

Accepted Answer

A) True 
 B)False

Question 10

Reasons that banks become insolvent include all of the following EXCEPT:

Accepted Answer

A) excessive credit risk 
B) interest rate risk 
C) insufficient collateral 
D) all of the above are correct 
A) excessive credit risk 
B) interest rate risk 
C) insufficient collateral 
D) all of the above are correct

Question 11

Which of the following statements is most correct?

Accepted Answer

A) New capital adequacy standards were established for foreign banking offices in this country to achieve an 8% risk-based capital ratio by the end of 1992 in order to conform to domestic bank requirements. 
B) The proportion of branch banking offices has doubled since 1951. 
C) The National Banking Act provided that national banks could issue their own paper money secured either by their own deposits or government bonds. 
D) All the above statements are equally correct. 
A) New capital adequacy standards were established for foreign banking offices in this country to achieve an 8% risk-based capital ratio by the end of 1992 in order to conform to domestic bank requirements. 
B) The proportion of branch banking offices has doubled since 1951. 
C) The National Banking Act provided that national banks could issue their own paper money secured either by their own deposits or government bonds. 
D) All the above statements are equally correct.

Question 12

An organization that sells or markets new securities issued by businesses to individuals and institutional investors is called a (n)

Accepted Answer

A) mutual fund 
B) investment bank 
C) insurance company 
D) brokerage firm 
A) mutual fund 
B) investment bank 
C) insurance company 
D) brokerage firm

Question 13

Which of the following are not thrift institutions?

Accepted Answer

A) credit unions 
B) savings and loan institutions 
C) commercial banks 
D) all the above 
A) credit unions 
B) savings and loan institutions 
C) commercial banks 
D) all the above

Question 14

Limited branch banking:

Accepted Answer

A) permits banks to located offices within a geographically defined distance of the main office 
B) is controlled by the Federal Reserve system 
C) means that banks may only engage in certain limited activities 
D) none of the above 
A) permits banks to located offices within a geographically defined distance of the main office 
B) is controlled by the Federal Reserve system 
C) means that banks may only engage in certain limited activities 
D) none of the above

Question 15

The National Banking Act of 1864 made it possible for banks to receive federal charters.

Accepted Answer

A) True 
 B)False

Question 16

There is more of a need for international banking because of:

Accepted Answer

A) decreased international trade 
B) a stable exchange of goods and services among nations 
C) the large international trade deficit of the United States 
D) national savings and investment rates that dictate small flows of capital among nations 
A) decreased international trade 
B) a stable exchange of goods and services among nations 
C) the large international trade deficit of the United States 
D) national savings and investment rates that dictate small flows of capital among nations

Question 17

__________________ are the two important forms of contractual savings organizations.

Accepted Answer

A) Insurance companies and pension funds 
B) banks and insurance companies 
C) Investment banks and pension funds 
D) Pension funds and brokerage firms 
E) none of the above 
A) Insurance companies and pension funds 
B) banks and insurance companies 
C) Investment banks and pension funds 
D) Pension funds and brokerage firms 
E) none of the above

Question 18

The Federal Deposit Insurance Corporation:

Accepted Answer

A) shares its operation with the Federal Reserve System by having the same board of directors 
B) is owned by member banks of the Federal Reserve System 
C) provides strength for insured banks by partial ownership of their stock 
D) has as one of its board members the United States Comptroller of the Currency 
A) shares its operation with the Federal Reserve System by having the same board of directors 
B) is owned by member banks of the Federal Reserve System 
C) provides strength for insured banks by partial ownership of their stock 
D) has as one of its board members the United States Comptroller of the Currency

Question 19

Pension funds receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees.

Accepted Answer

A) True 
 B)False

Question 20

The principal liabilities of all depository institutions are:

Accepted Answer

A) certificates of deposits 
B) deposits 
C) loans 
D) all the above 
A) certificates of deposits 
B) deposits 
C) loans 
D) all the above

The adequacy of capital for commercial banks as measured by regulatory authorities is:

The National Banking Act of 1864:

In 1989, the Financial Institution Reform, Recovery and Enforcement Act provided for all but which of the following?

Investment companies (mutual funds), investment banking firms, and brokerage firms are the primary types of ____________.

The Monetary Control Act:

The _______________________ was designed mainly to assist the savings and loan industry.

The Resolution Trust Corporation was brought into existence to:

The structure of the modern banking system includes commercial banks, savings and loans, mutual savings banks, and credit unions.

Commercial banks provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes.

Reasons that banks become insolvent include all of the following EXCEPT:

Which of the following statements is most correct?

An organization that sells or markets new securities issued by businesses to individuals and institutional investors is called a (n)

Which of the following are not thrift institutions?

Limited branch banking:

The National Banking Act of 1864 made it possible for banks to receive federal charters.

There is more of a need for international banking because of:

__________________ are the two important forms of contractual savings organizations.

The Federal Deposit Insurance Corporation:

Pension funds receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees.

The principal liabilities of all depository institutions are:

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 adequacy of capital for commercial banks as measured by regulatory authorities is:

The National Banking Act of 1864:

In 1989, the Financial Institution Reform, Recovery and Enforcement Act provided for all but which of the following?

Investment companies (mutual funds), investment banking firms, and brokerage firms are the primary types of ____________.

The Monetary Control Act:

The _______________________ was designed mainly to assist the savings and loan industry.

The Resolution Trust Corporation was brought into existence to:

The structure of the modern banking system includes commercial banks, savings and loans, mutual savings banks, and credit unions.

Commercial banks provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes.

Reasons that banks become insolvent include all of the following EXCEPT:

Which of the following statements is most correct?

An organization that sells or markets new securities issued by businesses to individuals and institutional investors is called a (n)

Which of the following are not thrift institutions?

Limited branch banking:

The National Banking Act of 1864 made it possible for banks to receive federal charters.

There is more of a need for international banking because of:

__________________ are the two important forms of contractual savings organizations.

The Federal Deposit Insurance Corporation:

Pension funds receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees.

The principal liabilities of all depository institutions are:

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