Question 1

Which of the following statements is true?

Accepted Answer

A) Credit unions are mutual cooperative organisations. 
B) Credit unions provide deposit facilities, personal and housing loans and payments services to their members. 
C) In case of credit unions the depositors are also members of the society. 
D) Credit unions are mutual cooperative organisations that provide deposit facilities, personal and housing loans and payments services to their members. 
A) Credit unions are mutual cooperative organisations. 
B) Credit unions provide deposit facilities, personal and housing loans and payments services to their members. 
C) In case of credit unions the depositors are also members of the society. 
D) Credit unions are mutual cooperative organisations that provide deposit facilities, personal and housing loans and payments services to their members.

Question 2

Costs to average assets ratio is the lowest for:

Accepted Answer

A) major banks 
B) credit unions 
C) building societies 
D) credit unions and building societies 
A) major banks 
B) credit unions 
C) building societies 
D) credit unions and building societies

Question 3

The difference between Australian major bank margins and those of regional banks is in the main due to:

Accepted Answer

A) flexibility of the regional banks. 
B) the ability of the regional banks to issue covered bonds. 
C) the advantage of the major banks in the funding market and to a lesser extent their asset mix. 
D) None of the listed options are correct. 
A) flexibility of the regional banks. 
B) the ability of the regional banks to issue covered bonds. 
C) the advantage of the major banks in the funding market and to a lesser extent their asset mix. 
D) None of the listed options are correct.

Question 4

Which of the following is true?

Accepted Answer

A) All banks are depository institutions and are authorised by APRA to carry out financial intermediation. 
B) All authorised depository institutions are banks. 
C) All financial intermediaries are authorised depository institutions by APRA to carry out financial intermediation. 
D) All of the listed options are correct. 
A) All banks are depository institutions and are authorised by APRA to carry out financial intermediation. 
B) All authorised depository institutions are banks. 
C) All financial intermediaries are authorised depository institutions by APRA to carry out financial intermediation. 
D) All of the listed options are correct.

Question 5

Which of the following is true?

Accepted Answer

A) PAIRS provides APRA with a score-card approach to assessing the risk of FI failure and the impact of any failure. 
B) PAIRS provides APRA with a single rating which incorporates both the probability that the FI will fail and the impact of any failure. 
C) PAIRS provides APRA with a rating that assesses the risk of FI failure. 
D) PAIRS provides APRA with an impact factor that determines what regulatory response needs to be implemented to prevent FI failure. 
A) PAIRS provides APRA with a score-card approach to assessing the risk of FI failure and the impact of any failure. 
B) PAIRS provides APRA with a single rating which incorporates both the probability that the FI will fail and the impact of any failure. 
C) PAIRS provides APRA with a rating that assesses the risk of FI failure. 
D) PAIRS provides APRA with an impact factor that determines what regulatory response needs to be implemented to prevent FI failure.

Question 6

Compare and contrast credit unions with the major banks.

Accepted Answer

In Australia, banks and credit unions ar

Question 7

Covered bonds:

Accepted Answer

A) were introduced following the GFC to ease liquidity pressures on the bank's balance sheet 
B) are issued by a bank, backed by a pool of assets, which remain on the balance sheet of the issuing bank 
C) are issued by a bank, backed by a pool of assets, which are off-balance-sheet items of the issuing bank 
D) are issued by the Reserve Bank of Australia to FIs with liquidity problems 
A) were introduced following the GFC to ease liquidity pressures on the bank's balance sheet 
B) are issued by a bank, backed by a pool of assets, which remain on the balance sheet of the issuing bank 
C) are issued by a bank, backed by a pool of assets, which are off-balance-sheet items of the issuing bank 
D) are issued by the Reserve Bank of Australia to FIs with liquidity problems

Question 8

In case of building societies, the members are usually linked to the society by some common bond such as locality or trade union.

Accepted Answer

A) True 
 B)False

Question 9

The current financial system in Australia consists of three major agencies, these being:

Accepted Answer

A) APRA, ASIC and the Australian government 
B) APRA, the RBA and the Australian government 
C) APRA, ASIC and the RBA 
D) the RBA, ASIC and the Australian government 
A) APRA, ASIC and the Australian government 
B) APRA, the RBA and the Australian government 
C) APRA, ASIC and the RBA 
D) the RBA, ASIC and the Australian government

Question 10

The most important source of bank funding is:

Accepted Answer

A) short-term debt 
B) long-term debt 
C) covered bonds 
D) domestic deposits 
A) short-term debt 
B) long-term debt 
C) covered bonds 
D) domestic deposits

Question 11

Most foreign banks have succeeded in establishing a well-developed and profitable retail banking network in Australia.

Accepted Answer

A) True 
 B)False

Question 12

Authorised depository institutions include:

Accepted Answer

A) banks, building societies, credit unions 
B) banks, building societies 
C) banks, credit unions 
D) only banks 
A) banks, building societies, credit unions 
B) banks, building societies 
C) banks, credit unions 
D) only banks

Question 13

Which of the following statements is true?

Accepted Answer

A) APRA stands for Australian Prudential Regulation Authority. 
B) APRA stands for Australian Payments Regulation Association. 
C) APRA stands for Australian Payments Review Authority. 
D) None of the listed options are correct. 
A) APRA stands for Australian Prudential Regulation Authority. 
B) APRA stands for Australian Payments Regulation Association. 
C) APRA stands for Australian Payments Review Authority. 
D) None of the listed options are correct.

Question 14

Credit unions were generally less affected than other depository institutions by the recent financial crisis because:

Accepted Answer

A) they hold more government securities, on average 
B) they hold less government securities, on average 
C) they had a focus on high-quality domestic assets 
D) they had a focus on domestic deposits and more assets in residential mortgages 
A) they hold more government securities, on average 
B) they hold less government securities, on average 
C) they had a focus on high-quality domestic assets 
D) they had a focus on domestic deposits and more assets in residential mortgages

Question 15

The major reasons for the shift in the composition of bank lending commitments from the retail market to the commercial market are the:

Accepted Answer

A) introduction of capital adequacy regulations in 1989 
B) number of non-bank depository institutions that gained banking licences in the early 1990s 
C) fact that commercial loans paid higher returns than housing loans 
D) None of the listed options are correct as the shift was from commercial loans to housing loans. 
A) introduction of capital adequacy regulations in 1989 
B) number of non-bank depository institutions that gained banking licences in the early 1990s 
C) fact that commercial loans paid higher returns than housing loans 
D) None of the listed options are correct as the shift was from commercial loans to housing loans.

Question 16

CUBS means credit unions and building societies.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is a role of a bank?

Accepted Answer

A) Attract funds from the capital markets to facilitate borrowing by the household sector. 
B) Accept deposits and make loans and in doing so facilitate the flow of funds from borrowers to lenders. 
C) Accept deposits and make loans and in doing so facilitate the flow of funds from savers to borrowers. 
D) Manage the level of interest rates. 
A) Attract funds from the capital markets to facilitate borrowing by the household sector. 
B) Accept deposits and make loans and in doing so facilitate the flow of funds from borrowers to lenders. 
C) Accept deposits and make loans and in doing so facilitate the flow of funds from savers to borrowers. 
D) Manage the level of interest rates.

Question 18

Which of the following statements is true?

Accepted Answer

A) APRA is responsible for market integrity and consumer protection across the financial system. 
B) The RBA is responsible for prudential supervision. 
C) ASIC is responsible for monetary policy and for overall financial system stability. 
D) None of the listed options are correct. 
A) APRA is responsible for market integrity and consumer protection across the financial system. 
B) The RBA is responsible for prudential supervision. 
C) ASIC is responsible for monetary policy and for overall financial system stability. 
D) None of the listed options are correct.

Which of the following statements is true?

Costs to average assets ratio is the lowest for:

The difference between Australian major bank margins and those of regional banks is in the main due to:

Which of the following is true?

Which of the following is true?

Compare and contrast credit unions with the major banks.

Covered bonds:

In case of building societies, the members are usually linked to the society by some common bond such as locality or trade union.

The current financial system in Australia consists of three major agencies, these being:

The most important source of bank funding is:

Most foreign banks have succeeded in establishing a well-developed and profitable retail banking network in Australia.

Authorised depository institutions include:

Which of the following statements is true?

Credit unions were generally less affected than other depository institutions by the recent financial crisis because:

The major reasons for the shift in the composition of bank lending commitments from the retail market to the commercial market are the:

CUBS means credit unions and building societies.

Which of the following is a role of a bank?

Which of the following statements is true?

Why Are Financial Institutions Special

The Financial Service Industry: Other Financial Institutions

Risks of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: the Duration Model

Managing Interest Rate Risk Using Off-Balance-Sheet Instruments

Managing Interest Rate Risk Using Securitisation

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risks

Capital Management and Adequacy

Filters

Exam 2: The Financial Service Industry: Depository Institutions

Which of the following statements is true?

Costs to average assets ratio is the lowest for:

The difference between Australian major bank margins and those of regional banks is in the main due to:

Which of the following is true?

Which of the following is true?

Compare and contrast credit unions with the major banks.

Covered bonds:

In case of building societies, the members are usually linked to the society by some common bond such as locality or trade union.

The current financial system in Australia consists of three major agencies, these being:

The most important source of bank funding is:

Most foreign banks have succeeded in establishing a well-developed and profitable retail banking network in Australia.

Authorised depository institutions include:

Which of the following statements is true?

Credit unions were generally less affected than other depository institutions by the recent financial crisis because:

The major reasons for the shift in the composition of bank lending commitments from the retail market to the commercial market are the:

CUBS means credit unions and building societies.

Which of the following is a role of a bank?

Which of the following statements is true?

Why Are Financial Institutions Special

The Financial Service Industry: Other Financial Institutions

Risks of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: the Duration Model

Managing Interest Rate Risk Using Off-Balance-Sheet Instruments

Managing Interest Rate Risk Using Securitisation

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risks

Capital Management and Adequacy

Filters