Finance Timed Homework 100 MCQs Answers

Question # 00582415
Subject: General Questions
Due on: 12/05/2017
Posted On: 12/05/2017 04:57 AM
Tutorials: 1
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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

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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

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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

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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

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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

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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

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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

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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

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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

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