Question 1

Credit unions may be federally or state chartered.If a credit union is chartered at the federal level,it is subject to the regulations imposed by the

Accepted Answer

A) Federal Reserve. 
B) National Credit Union Administration. 
C) State Banking Commission. 
D) Federal Credit Union Insurance Fund.

Question 2

One reason for the increasing proportion of total financial assets controlled by pension funds and investment companies is that these intermediaries exploit the comparative advantages of size and diversification.

Accepted Answer

A) True 
 B)False

Question 3

For the following problems, choose among the following major banking laws.
-This legislation limited the use of "too big to fail" bailouts.

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 (DI
A)  of 1982 
E) The Competitive Equality in Banking Act (CEB
A)  of 1987
F)The Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  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

The dual banking system in the U.S.refers to the operation and establishment of large regional as well as small community banks.

Accepted Answer

A) True 
 B)False

Question 5

The concept of enterprise risk management encourages FIs to manage all of the risks to which they are exposed as a portfolio,rather than managing each risk individually.

Accepted Answer

A) True 
 B)False

Question 6

As an asset transformer,the FI issues financial claims that are more attractive to household savers than the claims directly issued by corporations.

Accepted Answer

A) True 
 B)False

Question 7

Because bank loans have a shorter maturity than most debt contracts,FIs typically exercise less monitoring power and control over the borrower.

Accepted Answer

A) True 
 B)False

Question 8

The goal of credit allocation is the encouragement of FIs to diversity the composition of their assets.

Accepted Answer

A) True 
 B)False

Question 9

As of 2015,the number of nationally chartered banks was greater than the number of state chartered banks.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following identifies the primary function of the Office of the Comptroller of the Currency?

Accepted Answer

A) Manage the deposit insurance fund and carry out bank examinations. 
B) Regulate and examine bank holding companies as well as individual commercial banks. 
C) Charter national banks and approve their merger activity. 
D) Determine permissible activities for state chartered banks.

Question 11

The primary objective of the 1927 McFadden Act was to restrict interstate bank branching.

Accepted Answer

A) True 
 B)False

Question 12

Money center banks are considered to be any bank which

Accepted Answer

A) has corporate headquarters in either New York City,Chicago,San Francisco,Atlanta,Dallas,or Charlotte. 
B) is a net supplier of funds on the interbank market. 
C) relies almost entirely on nondeposit and borrowed funds as sources of liabilities. 
D) does not participate in foreign currency markets. 
E)  is not characterized by any of the above.

Question 13

As of 2015,U.S.FIs held assets totaling over $29 trillion.

Accepted Answer

A) True 
 B)False

Question 14

By diversifying investments,an FI is able to more accurately predict the expected return on its asset portfolio.

Accepted Answer

A) True 
 B)False

Question 15

Savers increasingly favor investments that closely imitate diversified investments in the direct securities markets over the transformed financial claims offered by traditional FIs.

Accepted Answer

A) True 
 B)False

Question 16

As with other DIs,profits or return on assets (ROAs)is the primary goal of credit union management.

Accepted Answer

A) True 
 B)False

Question 17

Nondepository financial institutions are represented by all of the following EXCEPT

Accepted Answer

A) insurance companies. 
B) mutual funds. 
C) finance companies. 
D) credit unions.

Question 18

In most countries,cash is required to be held in reserve against deposits.

Accepted Answer

A) True 
 B)False

Question 19

Safety and soundness regulations include all of the following layers of protection EXCEPT

Accepted Answer

A) the provision of guaranty funds. 
B) requirements encouraging diversification of assets. 
C) the creation of money for those FIs in financial trouble. 
D) requiring minimum levels of capital.

Question 20

Financial institutions are subject to economies of scale in the collection of information.

Accepted Answer

A) True 
 B)False

Exam 2: Financial Services: Depository Institutions

Credit unions may be federally or state chartered.If a credit union is chartered at the federal level,it is subject to the regulations imposed by the

One reason for the increasing proportion of total financial assets controlled by pension funds and investment companies is that these intermediaries exploit the comparative advantages of size and diversification.

For the following problems, choose among the following major banking laws. -This legislation limited the use of "too big to fail" bailouts.

The dual banking system in the U.S.refers to the operation and establishment of large regional as well as small community banks.

The concept of enterprise risk management encourages FIs to manage all of the risks to which they are exposed as a portfolio,rather than managing each risk individually.

As an asset transformer,the FI issues financial claims that are more attractive to household savers than the claims directly issued by corporations.

Because bank loans have a shorter maturity than most debt contracts,FIs typically exercise less monitoring power and control over the borrower.

The goal of credit allocation is the encouragement of FIs to diversity the composition of their assets.

As of 2015,the number of nationally chartered banks was greater than the number of state chartered banks.

Which of the following identifies the primary function of the Office of the Comptroller of the Currency?

The primary objective of the 1927 McFadden Act was to restrict interstate bank branching.

Money center banks are considered to be any bank which

As of 2015,U.S.FIs held assets totaling over $29 trillion.

By diversifying investments,an FI is able to more accurately predict the expected return on its asset portfolio.

Savers increasingly favor investments that closely imitate diversified investments in the direct securities markets over the transformed financial claims offered by traditional FIs.

As with other DIs,profits or return on assets (ROAs)is the primary goal of credit union management.

Nondepository financial institutions are represented by all of the following EXCEPT

In most countries,cash is required to be held in reserve against deposits.

Safety and soundness regulations include all of the following layers of protection EXCEPT

Financial institutions are subject to economies of scale in the collection of information.