Question 1

About what percentage of bank assets is made up of cash items in 2010?

Accepted Answer

A)  7.5% 
B)  20% 
C)  37% 
D)  50% 
A)  7.5% 
B)  20% 
C)  37% 
D)  50%

Question 2

Banks in the United States have been prohibited from investing deposits in significant equity holdings since the passage of the

Accepted Answer

A)  Bank Reform Act of 1980. 
B)  Securities and Exchange Acts of 1933 and 1934. 
C)  National Banking Acts of 1863 and 1864. 
D)  Sherman Antitrust Act of 1890. 
A)  Bank Reform Act of 1980. 
B)  Securities and Exchange Acts of 1933 and 1934. 
C)  National Banking Acts of 1863 and 1864. 
D)  Sherman Antitrust Act of 1890.

Question 3

A bank run involves

Accepted Answer

A)  a failure by a bank to get the maximum return on its investments. 
B)  large numbers of depositors withdrawing their deposits within a short period of time. 
C)  a bank being forced out of business. 
D)  fraud on the part of a bank's managers. 
A)  a failure by a bank to get the maximum return on its investments. 
B)  large numbers of depositors withdrawing their deposits within a short period of time. 
C)  a bank being forced out of business. 
D)  fraud on the part of a bank's managers.

Question 4

What are the different forms of bank borrowings?

Accepted Answer

Borrowings include short-term

Question 5

The Federal Reserve System was created in

Accepted Answer

A)  1836. 
B)  1863. 
C)  1913. 
D)  1945. 
A)  1836. 
B)  1863. 
C)  1913. 
D)  1945.

Question 6

In managing its liabilities to deal with liquidity problems,banks trade off

Accepted Answer

A)  credit risk against interest rate risk. 
B)  adverse selection against moral hazard. 
C)  the need for available funds to meet deposit outflows against the desire for greater profit. 
D)  present tax liabilities against future tax liabilities. 
A)  credit risk against interest rate risk. 
B)  adverse selection against moral hazard. 
C)  the need for available funds to meet deposit outflows against the desire for greater profit. 
D)  present tax liabilities against future tax liabilities.

Question 7

A key difference between small-denomination and large-denomination time deposits is that

Accepted Answer

A)  small-denomination time deposits pay no interest. 
B)  large-denomination time deposits may be bought and sold on secondary markets. 
C)  large-denomination time deposits carry a significant penalty for early withdrawal. 
D)  small-denomination time deposits carry a significant penalty for early withdrawal. 
A)  small-denomination time deposits pay no interest. 
B)  large-denomination time deposits may be bought and sold on secondary markets. 
C)  large-denomination time deposits carry a significant penalty for early withdrawal. 
D)  small-denomination time deposits carry a significant penalty for early withdrawal.

Question 8

What is the current limit on balances that are covered by federal deposit insurance?

Accepted Answer

A)  $100,000 
B)  $250,000 
C)  $500,000 
D)  $1,000,000 
A)  $100,000 
B)  $250,000 
C)  $500,000 
D)  $1,000,000

Question 9

Where do the FDIC's funds come from?

Accepted Answer

A)  Congress appropriates money for the FDIC, just as it does for other federal agencies. 
B)  The FDIC earns income through the insurance premiums paid by insured banks and from investment earnings. 
C)  The FDIC sells bonds in the financial markets. 
D)  The FDIC relies on voluntary contributions from the banking community. 
A)  Congress appropriates money for the FDIC, just as it does for other federal agencies. 
B)  The FDIC earns income through the insurance premiums paid by insured banks and from investment earnings. 
C)  The FDIC sells bonds in the financial markets. 
D)  The FDIC relies on voluntary contributions from the banking community.

Question 10

What percentage of bank assets were in loans in 2010?

Accepted Answer

A)  7.5% 
B)  20% 
C)  37% 
D)  60% 
A)  7.5% 
B)  20% 
C)  37% 
D)  60%

Question 11

How does the use of adjustable-rate mortgages affect interest-rate risk?

Accepted Answer

A)  It reduces the interest-rate risk of lenders. 
B)  It reduces the interest-rte risk of borrowers. 
C)  It reduces the interest-rate risk of both lenders and borrowers. 
D)  It increases the interest-rate risk of both lenders and borrowers. 
A)  It reduces the interest-rate risk of lenders. 
B)  It reduces the interest-rte risk of borrowers. 
C)  It reduces the interest-rate risk of both lenders and borrowers. 
D)  It increases the interest-rate risk of both lenders and borrowers.

Question 12

Currently,the FDIC insures deposits up to a limit of

Accepted Answer

A)  $1000. 
B)  $100,000. 
C)  $250,000. 
D)  $1,000,000. 
A)  $1000. 
B)  $100,000. 
C)  $250,000. 
D)  $1,000,000.

Question 13

Given that most banks have positive gap and negative durations,banks prefer

Accepted Answer

A)  lower market interest rates. 
B)  higher market interest rates. 
C)  higher market fixed rates but lower market floating rates. 
D)  either higher or lower market interest rates since interest rates have little effect on bank profits. 
A)  lower market interest rates. 
B)  higher market interest rates. 
C)  higher market fixed rates but lower market floating rates. 
D)  either higher or lower market interest rates since interest rates have little effect on bank profits.

Question 14

In 2010,the Treasury estimated that the bank portion of TARP would

Accepted Answer

A)  earn a profit 
B)  cost $60 billion 
C)  cost $180 billion 
D)  cost $700 billion 
A)  earn a profit 
B)  cost $60 billion 
C)  cost $180 billion 
D)  cost $700 billion

Question 15

A bank's revenue comes from all of the following EXCEPT

Accepted Answer

A)  interest earned on vault cash. 
B)  fees for services provided. 
C)  interest on loans. 
D)  interest on securities. 
A)  interest earned on vault cash. 
B)  fees for services provided. 
C)  interest on loans. 
D)  interest on securities.

Question 16

What are the advantages of bank deposits compared to other types of assets?

Accepted Answer

Compared to cash,bank deposits offer saf

Question 17

Bank capital is equal to

Accepted Answer

A)  the value of the capital originally invested in the bank by its owners. 
B)  the value of everything the bank owns. 
C)  the difference between the value of the bank's assets and the value of its liabilities. 
D)  the value of the buildings and other physical assets the bank owns. 
A)  the value of the capital originally invested in the bank by its owners. 
B)  the value of everything the bank owns. 
C)  the difference between the value of the bank's assets and the value of its liabilities. 
D)  the value of the buildings and other physical assets the bank owns.

Question 18

What percentage of bank assets were in security holdings in 2010?

Accepted Answer

A)  5% 
B)  13% 
C)  20% 
D)  37% 
A)  5% 
B)  13% 
C)  20% 
D)  37%

Question 19

When bank loan officers screen loan applicants to eliminate potentially bad risks,they are attempting to mitigate the problem of

Accepted Answer

A)  adverse selection. 
B)  moral hazard. 
C)  interest rate risk. 
D)  illiquidity. 
A)  adverse selection. 
B)  moral hazard. 
C)  interest rate risk. 
D)  illiquidity.

Question 20

If you have a checking account at First National Bank,the account is

Accepted Answer

A)  an asset to both you and First National. 
B)  a liability to both you and First National. 
C)  an asset to First National and a liability to you. 
D)  an asset to you and a liability to First National. 
A)  an asset to both you and First National. 
B)  a liability to both you and First National. 
C)  an asset to First National and a liability to you. 
D)  an asset to you and a liability to First National.

About what percentage of bank assets is made up of cash items in 2010?

Banks in the United States have been prohibited from investing deposits in significant equity holdings since the passage of the

A bank run involves

What are the different forms of bank borrowings?

The Federal Reserve System was created in

In managing its liabilities to deal with liquidity problems,banks trade off

A key difference between small-denomination and large-denomination time deposits is that

What is the current limit on balances that are covered by federal deposit insurance?

Where do the FDIC's funds come from?

What percentage of bank assets were in loans in 2010?

How does the use of adjustable-rate mortgages affect interest-rate risk?

Currently,the FDIC insures deposits up to a limit of

Given that most banks have positive gap and negative durations,banks prefer

In 2010,the Treasury estimated that the bank portion of TARP would

A bank's revenue comes from all of the following EXCEPT

What are the advantages of bank deposits compared to other types of assets?

Bank capital is equal to

What percentage of bank assets were in security holdings in 2010?

When bank loan officers screen loan applicants to eliminate potentially bad risks,they are attempting to mitigate the problem of

If you have a checking account at First National Bank,the account is

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

Investment Banks, mutual Funds, hedge Funds, and the Shadow Banking System

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I: the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

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Exam 10: The Economics of Banking

About what percentage of bank assets is made up of cash items in 2010?

Banks in the United States have been prohibited from investing deposits in significant equity holdings since the passage of the

A bank run involves

What are the different forms of bank borrowings?

The Federal Reserve System was created in

In managing its liabilities to deal with liquidity problems,banks trade off

A key difference between small-denomination and large-denomination time deposits is that

What is the current limit on balances that are covered by federal deposit insurance?

Where do the FDIC's funds come from?

What percentage of bank assets were in loans in 2010?

How does the use of adjustable-rate mortgages affect interest-rate risk?

Currently,the FDIC insures deposits up to a limit of

Given that most banks have positive gap and negative durations,banks prefer

In 2010,the Treasury estimated that the bank portion of TARP would

A bank's revenue comes from all of the following EXCEPT

What are the advantages of bank deposits compared to other types of assets?

Bank capital is equal to

What percentage of bank assets were in security holdings in 2010?

When bank loan officers screen loan applicants to eliminate potentially bad risks,they are attempting to mitigate the problem of

If you have a checking account at First National Bank,the account is

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

Investment Banks, mutual Funds, hedge Funds, and the Shadow Banking System

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I: the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters