FIN 461 Chp 2 Test 1

Which of the following FIs does not currently provide a payment function for their customers?
A. Depository institutions.
B. Insurance companies.
C. Finance companies.
D. Pension funds.
E. Mutual funds.
Click the card to flip 👆
1 / 14
Terms in this set (14)
Which of the following FIs does not currently provide a payment function for their customers?
A. Depository institutions.
B. Insurance companies.
C. Finance companies.
D. Pension funds.
E. Mutual funds.
D. Pension funds
The largest asset class on U.S. commercial banks' balance sheet as of September 30, 2012 was
A. investment securities.
B. commercial and industrial loans.
C. real estate loans.
D. cash.
E. deposits.
C. real estate loans.
The largest asset class on FDIC-insured savings institutions' balance sheet as of year-end 2012 was
A. mortgage loans.
B. cash.
C. investment securities.
D. deposits.
E. non-mortgage Loans.
A. mortgage loans.
National-chartered commercial banks are most likely to be regulated by
A. the FDIC only.
B. the FDIC and the Federal Reserve System.
C. the Federal Reserve System only.
D. the FDIC, the Federal Reserve System, and the Comptroller of the Currency.
E. the Federal Reserve System and the Comptroller of the Currency.
D. the FDIC, the Federal Reserve System, and the Comptroller of the Currency.
State-chartered commercial banks may be regulated by
A. the FDIC only.
B. the FDIC and the Federal Reserve System.
C. the Federal Reserve System only.
D. the FDIC, the Federal Reserve System, and the Comptroller of the Currency.
E. the FDIC, the Federal Reserve System, the Comptroller of the Currency, and state banking
commissions.
E. the FDIC, the Federal Reserve System, the Comptroller of the Currency, and state banking
commissions.
Money center banks are considered to be any bank which
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.
C. relies almost entirely on nondeposit and borrowed funds as sources of liabilities.
Regulatory forbearance refers to a policy of
A. allowing insolvent banks to continue to operate.
B. foreclosing real estate properties in the event on non-payments of mortgages.
C. strict regulation of banks, closing them down as soon as they are insolvent.
D. rescheduling of all loans of a client in the event of non-payment.
E. Answers B and C only.
A. allowing insolvent banks to continue to operate.
Customer deposits are classified on a DI's balance sheet as
A. assets, because the DI uses deposit funds to earn profits.
B. liabilities, because the DI uses deposits as a source of funds.
C. assets, because customers view deposits as assets.
D. liabilities, because the DI must meet reserve requirements on customer deposits.
E. liabilities, because DIs are required to serve depositors.
B. liabilities, because the DI uses deposits as a source of funds.
Which of the following is true of off-balance-sheet activities?
A. They involve generation of fees without exposure to any risk.
B. They include contingent activities recorded in the current balance sheet.
C. They invite regulatory costs and additional "taxes."
D. They have both risk-reducing as well as risk-increasing attributes.
E. The risk involved is best represented by notional or face value.
D. They have both risk-reducing as well as risk-increasing attributes.
Which of the following identifies the primary function of the Office of the Comptroller of the Currency?
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.
E. Stand as the "lender of last resort" for troubled banks.
C. Charter national banks and approve their merger activity
What was the primary objective of the Bank Holding Company Act of 1956? A. Permitted bank holding companies to acquire banks in other states. B. Restricted the banking and nonbanking acquisition activities of multibank holding companies. C. Regulated foreign bank branches and agencies in the United States. D. Bank holding companies were permitted to convert out-of-state subsidiary banks into branches of a single interstate bank. E. Allowed for the creation of a financial services holding company.B. Restricted the banking and nonbanking acquisition activities of multibank holding companies.Credit Unions were generally less affected than other depository institutions by the recent financial crisis because A. they had relatively more assets in consumer loans than other DIs. B. they had relatively more residential mortgages. C. they hold more government and agency securities, on average. D. they hold less government and agency securities, on average. E. Answers A and C only.E. Answers A and C only.Compared to banks and savings institutions, credit unions are able to pay a higher rate on the deposits of members because A. they intend to attract new members. B. they do not issue common stock. C. of their tax-exempt status. D. Regulation Q still applies to the industry. E. they are subject to the provisions of the Community Reinvestment Act.C. of their tax-exempt status.Correspondent banking may involve A. providing banking services to other banks facing shortage of staff. B. providing foreign exchange trading services to individuals. C. holding and managing assets for individuals or corporations. D. acting as transfer and disbursement agents for pension funds. E. providing hedging services to corporations.D. acting as transfer and disbursement agents for pension funds.