Question 1
Which of the following trading
practices is forbidden in the secondary market?
I. Trading on information that
gives corporate insiders an unfair advantage over the public
II. Trading designed to manipulate
securities prices at the expense of the public
III. Trading before true and
adequate disclosure has been made to the public
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
Question 2
A primary offering occurs when
Select one:
A. previously issued securities
are traded among investors.
B. a company's previously issued
securities are traded by a single broker.
C. corporations issue securities
in order to secure additional financing.
D. purchases of marketable
securities are made by the issuing company.
Question 3
Not yet answered
Marked out of 1.00
Flag question
Which of the following securities
provisions created the Securities Exchange Commission (SEC) to enforce
securities laws and regulate U.S.
securities markets?
Select one:
A. The Securities Act of 1933
B. The Securities Exchange Act of
1934
C. Rule 415
D. Reg ATS
Question 4
Not yet answered
Marked out of 1.00
Flag question
Which of the following is true
concerning commercial paper?
I. Commercial paper is offered in
short-term maturities suitable for the money market
II. All public corporations
qualify to issue commercial paper
III. The cost to the issuer of
raising funds using commercial paper is usually lower than borrowing at the
prime lending rate
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
Question 5
Not yet answered
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Flag question
Common money market instruments
used by importers to guarantee funds owed to exporters are known as
Select one:
A. negotiable certificates of
deposit.
B. bankers' acceptances.
C. garnishment agreements.
D. repurchase agreements.
Question 6
Not yet answered
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Flag question
Secondary markets:
I. Allow investors to buy or sell
previously issued securities
II. Provide additional funds to
corporations when securities are traded
III. Promote market pricing
competition for securities
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
Question 7
Not yet answered
Marked out of 1.00
Flag question
The majority of debt financing for
U.S. corporations is raised on
Select one:
A. the OTC market.
B. the NYSE.
C. ECNs.
D. None of the above.
Question 8
Not yet answered
Marked out of 1.00
Flag question
Which of the following securities
provisions required registration and full disclosure of new securities
being issued in the U.S.?
Select one:
A. The Securities Act of 1933
B. The Securities Exchange Act of
1934
C. Rule 415 (shelf registration)
D. Reg ATS (alternative trading
system)
Question 9
Not yet answered
Marked out of 1.00
Flag question
The NASDAQ Exchange:
I. Is divided into two market
segments, a "National Market," and a "Small-Cap
Market"
II. Is less restrictive in its
requirements for membershipies than the New York Stock Exchange (NYSE)
III. Offers
"unlisted" securities to investors
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
Question 10
Not yet answered
Marked out of 1.00
Flag question
Funds flow from __________ to
__________ in the primary markets.
Select one:
A. investors; issuing corporations
B. investors; other investors
C. issuing corporations; investors
D. All of the above.
Question 11
Which of the following is NOT true
of the NASDAQ exchange?
I. It is located on Wall Street,
where brokers transact business for clients
II. It was once operated by the
National Association of Securities Dealers (NASD)
III. It is a publicly-owned,
not-for-profit exchange
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
Question 12
Secondary markets typically
provide:
I. Liquidity
II. Price competition
III. Deposit insurance
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
Question 13
Commercial paper securities
Select one:
A. carry an interest rate that
varies according to the firm's level of risk.
B. never have a term to maturity
that exceeds 270 days.
C. are issued only by the largest
and most creditworthy corporations, as they are unsecured.
D. all of the above.
E. only A and B of the above.
Question 14
In situations where asymmetric
information problems are not severe,
Select one:
A. the money markets have a
distinct cost advantage over banks in providing short-term funds.
B. the money markets cannot
allocate short-term funds as efficiently as banks can.
C. banks have a distinct cost
advantage over the money markets in providing short-term funds.
D. the money markets have a
distinct cost advantage over banks in providing long-term funds.
Question 15
Money market transactions
Select one:
A. are usually arranged purchases
and sales between participants over the phone by traders and
completed electronically.
B. do not take place in any one
particular location or building.
C. both (a) and (b).
D. none the the above.
Question 16
Which of the following statements
about money market securities are true?
Select one:
A. There is no well-developed
secondary market for commercial paper.
B. The interest rates on all money
market instruments move very closely together over time.
C. The secondary market for
Treasury bills is extensive and well developed.
D. All of the above are true.
E. Only A and B of the above are
true.
Question 17
Money market instruments:
I. Typically have low default risk
II. Have short-term maturities
III. Are usually sold in large
denominations
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III
Question 18
The primary function of large
diversified brokerage firms in the money market is to
Select one:
A. make a market for money market
securities by maintaining an inventory from which to buy or sell.
B. buy T-bills from the U.S.
Treasury Department.
C. buy money market securities
from corporations that need liquidity.
D. sell money market securities to
the Federal Reserve for its open market operations.
Question 19
Compared to money market
securities, capital market securities have
Select one:
A. less risk.
B. longer maturities.
C. more liquidity.
D. lower yields.
Question 20
Treasury bonds are subject to
_________ risk but are free of _________ risk.
Select one:
A. interest-rate; underwriting
B. default; interest-rate
C. interest-rate; default
D. default; underwriting
Question 21
A firm will borrow long-term
Select one:
A. if short-term interest rates
are expected to decline during the term of the debt.
B. if the extra interest cost of
borrowing short-term due to rising interest rates does not exceed the
expected premium that is paid for
borrowing long term.
C. if the extra interest cost of
borrowing long-term is less than the expected cost of rising interest rates
before it retires its debt.
D. if long-term interest rates are
expected to decline during the term of the debt.
Question 22
Capital market trading occurs in
Select one:
A. the primary market.
B. the secondary market.
C. both A and B
D. none of the above.
Question 23
Bonds
Select one:
A. are securities that represent a
debt owed by the issuer to the investor.
B. obligate the issuer to pay a
specified amount at a given date, generally without periodic interest
payments.
C. both A & B.
D. none of the above.
Question 24
Long-term unsecured bonds that are
backed only by the general creditworthiness of the issuer are called
Select one:
A. convertible bonds.
B. junk bonds.
C. debentures.
D. callable bonds.
Question 25
Which of the following is true of
Electronic Communications Networks (ECNs)?
I. Transactions costs are lower
for ECN trades
II. All unfilled orders are
available for review by ECN traders
III. ECNs tend to work well for
thinly-traded stocks
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
Question 26
Which of the following statements
about trading operations in an organized ("floor") exchange
is correct?
I. Floor traders all deal in a
wide variety of stocks
II. In most trades, specialists
buy for or sell from their own inventories
III. In most trades, specialists
match buy and sell orders.
Select one:
A. I only
B. II only
C. III only
D. I and II only
E. II and III only
Question 27
Preferred stockholders hold a
claim on assets that has priority over the claims of
Select one:
A. common stockholders, but after
that of bondholders.
B. bondholders, but after that of
common stockholders.
C. neither common stockholders nor
bondholders.
D. both common stockholders and
bondholders.
Question 28
Securities not listed on one of
the exchanges trade in the over-the-counter market. In this exchange, dealers
"make a market"
by
Select one:
A. selling stocks from inventory
when investors want to buy.
B. buying stocks for inventory
when investors want to sell.
C. doing both of the above.
D. doing neither of the above.
Question 29
How does over-the-counter (OTC)
trading differ from trading on an organized exchange?
I. Requirements for trading OTC
are less restrictive than on organized exchanges
II. Trading cannot be done
electronically on organized exchanges
III. No publicly-traded stocks can
be offered OTC
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III
Question 30
Which of the following is an
objective of the Securities and Exchange Commission?
I. Maintain the integrity of the
securities markets
II. Require firms to provide
specific information to investors
III. Regulate major participants
in securities markets
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III
Question 31
Which of the following are
important ways in which mortgage markets differ from stock and bond
markets?
Select one:
A. The usual borrowers in capital
markets are government entities, whereas the usual borrowers in
mortgage markets are small
businesses.
B. The usual borrowers in capital
markets are government entities and large businesses, whereas the
usual borrowers in mortgage
markets are small businesses.
C. The usual borrowers in capital
markets are businesses and government entities, whereas the usual
borrowers in mortgage markets are
individuals.
D. The usual borrowers in capital
markets are government entities and large businesses, whereas the
usual borrowers in mortgage
markets are small businesses and individuals.
Question 32
The Federal Housing Administration
(FHA)
Select one:
A. provides insurance for certain
mortgage contracts.
B. was set up to buy mortgages
from thrifts so that these institutions could make more loans.
C. funds purchases of mortgages by
selling bonds to the public.
D. all of the above.
E. only A and B of the above.
Question 33
Which of the following are
important ways in which mortgage markets differ from the stock and bond
markets?
Select one:
A. Because mortgages are made for
different amounts and different maturities, developing a secondary
market has been more difficult.
B. Most mortgages are secured by
real estate, whereas the majority of capital market borrowing is
unsecured.
C. The usual borrowers in the
capital markets are government entities and businesses, whereas the
usual borrowers in the mortgage
markets are individuals.
D. All of the above are important
differences.
E. Only A and B of the above are
important differences.
Question 34
The most common type of
mortgage-backed security is
Select one:
A. the participation certificate,
a security which passes the borrower's mortgage payments equally
among all the owners of the
certificates.
B. collateralized mortgage
obligations, a security which reduces prepayment risk.
C. the mortgage pass-through, a
security that has the borrower's mortgage payments pass through the
trustee before being disbursed to
the investors.
D. the securitized mortgage, a
security which increases the liquidity of otherwise illiquid mortgages.
Question 35
Mortgage-backed securities
Select one:
A. are securities collateralized
by both insured and uninsured mortgages.
B. have been growing in popularity
in recent years as institutional investors look for attractive
investment opportunities.
C. are securities collateralized
by a pool of mortgages.
D. all of the above.
E. only A and B of the above.
Question 36
The Federal National Mortgage Association
(Fannie Mae)
Select one:
A. funds purchases of mortgages by
selling bonds to the public.
B. was set up to buy mortgages
from thrifts so that these institutions could make more loans.
C. provides insurance for certain
mortgage contracts.
D. all of the above.
E. only A and B of the above.
Question 37
When the exchange rate changes
from 1.0 euros to the dollar to 0.8 euros to the dollar, then the euro has
_________ and the dollar has
_________.
Select one:
A. appreciated; appreciated
B. depreciated; depreciated
C. appreciated; depreciated
D. depreciated; appreciated
Question 38
Which of the following causes a
depreciation of the domestic currency?
I. A lower expected domestic
inflation rate.
II. A decrease in the domestic
money supply.
III. A decline in the domestic
real interest rate.
Select one:
A. I only
B. II only
C. III only
D. I and II only
E. II and III only
Question 39
If the demand for _________ goods
decreases relative to _________ goods, the domestic currency will
depreciate.
Select one:
A. domestic; domestic
B. foreign; foreign
C. foreign; domestic
D. domestic; foreign
Question 40
Increased demand for a country's
_________ causes its currency to appreciate in the long run, while
increased demand for _________
causes its currency to depreciate.
Select one:
A. imports; exports
B. imports; imports
C. exports; imports
D. exports; exports
Question 41
When the exchange rate for the
euro changes from $1.20 to $1.00, then, holding everything else constant,
the euro has
Select one:
A. depreciated and American wheat
sold in Germany becomes less expensive.
B. appreciated and German cars
sold in the United States become more expensive.
C. appreciated and German cars
sold in the United States become less expensive.
D. depreciated and American wheat
sold in Germany becomes more expensive.
Question 42
An increase in the foreign
interest rate causes __________ in the demand for __________ currency and the
foreign currency to appreciate.
Select one:
A. an increase; domestic
B. a decrease; foreign
C. an increase; foreign
D. none of the above
Question 43
A lower domestic money supply
causes the domestic currency to
Select one:
A. depreciate in the long run.
B. appreciate in the short run.
C. depreciate in the short run.
D. do both A and B of the above.
E. do both B and C of the above.
Question 44
The _________ states that exchange
rates between any two currencies will adjust to reflect changes in the
price levels of the two countries.
Select one:
A. quantity theory of money
B. theory of purchasing power
parity
C. law of one price
D. theory of money neutrality
Question 45
A spot transaction in the foreign
exchange market involves the
Select one:
A. immediate (within two days)
exchange of exports and imports.
B. exchange of bank deposits at a
specified future date.
C. exchange of exports and imports
at a specified future date.
D. immediate (within two days)
exchange of bank deposits.
Question 46
When an increase in the money
supply causes the exchange rate to fall by more in the short run than it does
in the long run, it is called
Select one:
A. exchange rate overshooting.
B. the J-curve effect.
C. exchange rate disequilibrium.
D. none of the above.
Question 47
The Bretton Woods system was one
in which central banks
Select one:
A. agreed to limit domestic money
growth to the average of the five largest industrial nations.
B. agreed not to intervene in the
foreign exchange market to maintain a fixed exchange rate regime
that had existed prior to World
War I.
C. agreed to limit domestic money
growth to the average of the seven largest industrial nations.
D. bought and sold their own
currencies to keep their exchange rates fixed.
Question 48
A foreign exchange intervention
with an offsetting open market operation that leaves the monetary base
unchanged is called
Select one:
A. an exchange rate feedback rule.
B. an unsterilized foreign
exchange intervention.
C. a money neutral foreign
exchange intervention.
D. a sterilized foreign exchange
intervention.
Question 49
The difference between merchandise
exports and imports is called the
Select one:
A. capital account balance.
B. current account balance.
C. balance of payments.
D. trade balance.
Question 50
The official reserve transactions
balance is referred to as
Select one:
A. the capital account.
B. the current account.
C. net change in government
international reserves.
D. the trade balance.
Question 51
The Bretton Woods agreement
created the _________, which was given the task of promoting the growth
of world trade by setting rules for
the maintenance of fixed exchange rates and by making loans to
countries that were experiencing
balance of payments difficulties.
Select one:
A. European Exchange Rate
Mechanism (ERM)
B. IMF
C. Bank of International
Settlements
D. Central Settlements Bank
E. World Bank
Question 52
The Bretton Woods agreement set up
the _________, which currently provides long-term loans to assist
developing countries to build
dams, roads, and other physical capital that contributes to economic
development.
Select one:
A. Central Settlements Bank
B. World Bank
C. International Monetary Fund
D. European Exchange Rate
Mechanism (ERM)
E. Bank of International
Settlements
Question 53
A dirty float is when:
Select one:
A. The value of a currency is
pegged relative to an anchor currency
B. The value of a currency is
pegged relative to the value of one other currency
C. Countries intervene in foreign
exchange markets in an attempt to influence their exchange rates by
buying and selling foreign assets
D.
The value of a currency is allowed
to freely fluctuate against all other currencies
Question 54
When the central bank allows the
purchase or sale of domestic currency to have an effect on the monetary
base, it is called
Select one:
A. a money neutral foreign
exchange intervention.
B. an exchange rate feedback rule.
C. a sterilized foreign exchange
intervention.
D. an unsterilized foreign
exchange intervention.
Question 55
What is the bookkeeping system for
recording all receipts and payments that have a direct bearing on the
movement for funds between a
nation and foreign countries?
Select one:
A. Current Account
B. Trade balance
C. Balance of payments
D. Capital Account
Question 56
The current account balance plus
the capital account balance equals
Select one:
A. the trade balance.
B. the amount of unsterilized
exchange market intervention.
C. the net change in government
international reserves.
D. both A and C of the above.
Question 57
The bundling of GNMA-guaranteed
mortgages into a saleable security (usually for large institutional
investors) is called
Select one:
A. disintermediation.
B. hedge optioning.
C. securitization.
D. futures bundling.
E. quasi-intermediation.
Question 58
The main center of the Eurodollar
market is
Select one:
A. London.
B. Basel.
C. New York.
D. Paris.
Question 59
The practice of creating
marketable debt instruments that are backed by otherwise illiquid assets is
known
as
Select one:
A. standardization.
B. securitization.
C. adverse selection.
D. homogenization.
Question 60
Investment banking activities of
the commercial banks were blamed for many bank failures. This led to
Select one:
A. the passage of the Garn-St.
Germain Act of 1982.
B. the passage of the
Glass-Steagall Act of 1933.
C. the passage of the National
Bank Charter Amendments Act of 1918.
D. the passage of the National
Bank Act of 1863.
E. the establishment of the
Federal Deposit Insurance Corporation in 1933.
Question 61
In recent years, commercial banks
have been allowed to
Select one:
A. enter certain insurance
markets.
B. invest in real estate.
C. underwrite stocks.
D. do all of the above.
E. only A and B of the above.
Question 62
The legislation that effectively
prohibited banks from branching across state lines and forced all national
banks to conform to the branching
regulations of the state in which they reside is the
Select one:
A. Glass-Steagall Act.
B. Garn-St. Germain Act.
C. McFadden Act.
D. National Banking Act.
Question 63
High-yield bonds rated below
investment grade by the bond-rating agencies are frequently referred to as
Select one:
A. "fallen
angels."
B. municipal bonds.
C. Yankee bonds.
D. junk bonds.
Question 64
Which regulatory body charters national
banks?
Select one:
A. The Comptroller of the Currency
B. The Federal Reserve
C. The Federal Deposit Insurance
Corporation
D. None of the above
Question 65
The most important developments
that have reduced banks' income advantages in the past twenty years
include
Select one:
A. the growth of the junk bond
market.
B. the growth of the commercial
paper market.
C. the elimination of Regulation Q
ceilings.
D. all of the above.
E. only A and B of the above.
Question 66
The Riegle-Neal Act of 1994
Select one:
A. required all banks to become
universal banks.
B. allowed banks to underwrite
insurance and securities and engage in real estate activities.
C. removed ceilings on bank
deposit interest rates.
D. overturned prohibitions on
interstate banking and branching.
Question 67
Credit unions' main type of loans
is:
Select one:
A. Home mortgage and auto loans
B. Small business loans
C. Credit card loans
D. Nonresidential real estate
loans
Question 68
The S & L Crisis in the
1980s
Select one:
A. was at the time, the most
severe financial crisis since the Great Depression
B. was exacerbated by the practice
of borrowing short and lending long
C. was not affected by regulatory
forbearance
D. Both A and B are correct
Question 69
Credit unions are characterized
by:
I. Common-bond membership
II. Non-profit, tax-exempt status
III. Mutual ownership
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III
Question 70
The Federal Deposit Insurance
Corporation Improvement Act (FDICA) of 1991
Select one:
A. Recapitalized the FDIC
B. Limited brokered deposits and
the too-big-to fail policy
C. Instructed the FDIC to
establish risk-based premiums
D. did all of the above.
E. did only A and B of the above.
Question 71
The Competitive Equality in
Banking Act of 1987
Select one:
A. discouraged regulators from
pursuing regulatory forbearance.
B. encouraged regulators to
continue their policy of regulatory forbearance.
C. directed regulators to close
"zombie S&Ls" as quickly as administratively
possible.
D. did both A and B of the above.
Question 72
The main source of funds at
savings and loan associations is
Select one:
A. borrowing in the capital
market.
B. deposits.
C. equity capital.
D. borrowing in the money market.
Question 73
To act in the tax payer's interest
and low costs to the deposit insurance agency, regulators must
Select one:
A. set tight restrictions on
holding assets that are too risky.
B. not adopt a stance of
regulatory forbearance.
C. impose high capital
requirements.
D. all of the above.
Question 74
Since the early 1990s, the number
of savings and loan associations has _________ and the average size (in
assets) has _________.
Select one:
A. risen; risen
B. risen; declined
C. declined; declined
D. declined; risen
Question 75
The major provisions of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989
included:
I. Establishing the Resolution
Trust Corporation to manage and liquidate insolvent thrifts
II. Increased deposit insurance
III. Implementing new lending
restrictions
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III
Question 76
Since 1993, the number of savings
and loan associations has
Select one:
A. risen slightly.
B. held steady.
C. declined substantially.
D. risen sharply.
Question 77
Which of the following is true
concerning multilateral financial institutions? Multilaterals:
Select one:
A. receive primary funding from
the world's major industrialized nations.
B. offer official development
assistance to developing countries.
C. have been criticized for
driving countries further ito debt and financial vulnerability.
D. All of the above.
Question 78
Faced with a continuing drain of
U.S. gold reserves, the U.S. chose to
Select one:
A. allow interest rates to rise in
order to attract gold back into U.S. vaults.
B. lower the exchange ratio of
dollars to gold from 1/35 ounce to 1/70 ounce.
C. eliminate the redemption of
foreign-held U.S. dollars for gold.
D. end the military draft in an
effort to boost U.S. productivity.
Question 79
Today's major industrialized
nations are using a foreign exchange system known as
Select one:
A. managed float
B. pegged rates
C. free float
D. fixed rates
Question 80
The The International Monetary
Fund (IMF):
I. Is considered to be the
international lender of last resort.
II. Is primarily responsible for
determining U.S. monetary policy and short-term interest rates.
III. Makes structural adjustment
loans, which are often extended, to countries with a variety of debt-related
problems.
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
Question 81
Under a system of floating
exchange rates, which of the following conditions would the Canadian dollar
tend to appreciate in value
against the U.S. dollar?
Select one:
A. Canadian banks offer lower
rates of interest than U.S. banks.
B. The rate of inflation in Canada
is lower than in the U.S.
C. There is a rising demand for
U.S. goods on the part of Canadian consumers.
D. Canadians perceive that the
U.S. is about to experience higher economic growth.
Question 82
Which of the following will lead
an American to exchange U.S. dollars for British pounds?
Select one:
A. Importing a case of British
salmon
B. Purchasing a cottage in the
British countryside
C. Investing in a British
manufacturing company
D. All of the above
Question 83
The Bank for International
Settlements (BIS)
Select one:
A. provides short-term bridge
loans to nations facing an immediate financial crisis.
B. is a
"think-tank" for central bankers in matters concerning
international finance.
C. is considered to be
authoritative concerning matters of international finance.
D. all of the above.
Question 84
The foreign-exchange system
adopted at the Bretton Woods Conference can be characterized as a
Select one:
A. traditional gold standard.
B. floating exchange standard.
C. fixed exchange standard.
D. non-interventionist standard.
Question 85
Which of the following was a
managed float agreement signed by the major industrialized nations in 1987?
Select one:
A. The Greenspan Currency Control
Act
B. The Western Currency Management
Agreement
C. The Geneva Exchange Rate Accord
D. The Louvre Currency
Stabilization Accord
Question 86
An inflow of U.S. dollars to the
U.S. Balance of Payments account will occur when
Select one:
A. the U.S. buys foreign currency
in international markets.
B. the U.S. donates foreign aid to
other countries.
C. Americans make investments in
foreign assets.
D. the U.S. exports merchandise to
foreign countries.
Question 87
All else held constant, the
near-term result of a decrease in the exchange value of country A's currency
against country B's currency would
most likely
Select one:
A. increase A's exports to B.
B. decrease B's trade deficit with
A.
C. increase B's exports to A.
D. decrease B's imports from A.
Question 88
Which of the following
multilateral institutions provides long-term development loans to governments
of
developing nations?
Select one:
A. The BIS
B. The IMF
C. The World Bank
D. All of the above
Question 89
Corporations with a controlling
interest in one or more affiliated banks are known as
Select one:
A. commercial banks.
B. bank holding companies.
C. government sponsored
enterprises.
D. mutual fund companies.
Question 90
Credit unions:
I. Offer their members savings and
checking services similar to those of commercial banks
II. Are non-profit entities that
typically pass cost savings on to members
III. Are insured by the Federal
Deposit Insurance Corporation (FDIC)
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
Question 91
Which of the following statements
is true international banking?
I. The explosive growth in
Eurodollar lending has led to an increase in the number of U.S. branch banks
abroad
II. Due to trade restrictions,
foreign banks have not been successful in the U.S., where they do very little
banking
III. Stricter regulations abroad
makes international banking more expensive for U.S. banks
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III
Question 92
Which of the following statements
is true regarding bank charters?
I. National banks are chartered by
the U.S. comptroller of the currency.
II. Banks may be chartered at
either the national or state level.
III. Only nationally-chartered
banks can be members of the Federal Reserve System
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
Question 93
Which of the following, enacted in
1933 for the purpose of separating commercial and investment banking
in the U.S., was repealed in 1999
by passage of the Gramm-Leach-Bliley Act?
Select one:
A. The Glass-Steagall Act
B. The Stevens-Seagal Act
C. The Morgan-Stanley Act
D. The Commercial Securities Act
Question 94
Most domestic banks in the U.S.
are
Select one:
A. nationally chartered.
B. state chartered.
C. members of the Federal Reserve
System.
D. all of the above.
Question 95
By law, credit unions are:
I. Not-for-profit depository
intermediaries
II. Tax-exempt financial
institutions
III. Disallowed from engaging in
any business lending
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III
Question 96
Financial holding companies are:
I. Companies that hold a variety
of different types of financial institutions
II. Are currently being regulated
by the U.S. Office of the Comptroller of the Currency
III. Cannot hold both depository
and non-depository financial intermediaries
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III
Question 97
Which of the following is true
concerning depository financial intermediaries?
I. They are important to the
channeling of funds between lenders and borrowers.
II. They are chartered and
regulated in an effort to protect depositors and the financial system.
III. They are required to make
loans to anyone with an adequate credit score.
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
Question 98
A large domestic bank with
headquarters in New York City that provides international lending and
payments services to large,
multinational business firms is most likely to be a:
Select one:
A. Money Center bank
B. Regional bank
C. Mid-Market bank
D. Community bank
Question 99
The difference between what a
commercial bank pays for its deposits and what it earns on its loans is called
the
Select one:
A. margin interest or lending
spread.
B. earnings before interest and
taxes.
C. return on shareholder's
investment.
D. underwriting spread.
Question 100
Which of the following acts broke
down the wall of separation between securities underwriting and
commercial lending?
Select one:
A. Gramm-Leach-Bliley Financial
Services Modernization Act
B. Riegle-Neal Interstate Banking
and Branching Efficiency Act (IBBEA)
C. Financial Institutions Reform,
Recovery, and Enforcement Act (FIRREA)
D. None of the above
