Banking Finance
According to the textbook, large banks possess some potential advantages over small and medium-size banks. Which of the following is not such an advantage? A. Greater diversification, geographically and by product line B. Availability of financial capital at lower cost C. Greater professional expertise to allocate capital to the most promising products and services D. Better positioned to take advantage of the opportunities afforded by interstate banking E. All the options are advantages typically possessed by large banks
E
Banks are regulated for which of the reasons listed below? A. Banks are leading repositories of the public's savings. B. Banks have the power to create money. C. Banks provide businesses and individuals with loans that support consumption and investment spending. D. Banks assist governments in conducting economic policy, collecting taxes, and dispensing government payments. E. All of the options are correct.
E
Chandriga Suppiah has opened a Roth IRA with North Carolina State Bank and plans on making regular contributions to this account until she retires. Which of the financial services is Chandriga taking advantage of? A. Getting a consumer loan B. Getting financial advice C. Managing cash D. Getting venture capital services E. Buying a retirement plan
E
During the financial crisis of 2007-2009, the collapse of Lehman Brothers and the bailout of Bear Stearns reaffirmed the importance of the fundamental principle of: A. superior management. B. globalization. C. government bailout. D. regulatory arbitrage. E. public trust and confidence in the system.
E
Included among leading structural trends in the U.S. banking industry in recent years are: A. the number of independently owned banks has declined. B. the average size of individual banking firms has increased. C. entry across state lines from neighboring states has increased. D. the mergers among some of the largest banks in the industry. E. All of the options are correct.
E
Jonathan Wynn knows that if he wanted to purchase a Treasury Bill, the minimum amount he would spend would be close to $10,000. He also knows that he could deposit $1,000 in a money market deposit account at a bank and earn about the same rate of interest. Jonathan does not have $10,000 to invest in a Treasury Bill. If Jonathan puts his money in the bank, which service that a bank can provide, is he taking advantage of? A. Risky arbitrage services B. Liquidity services C. Delegated monitoring services D. Divisibility of money services E. Credit services
E
The 1977 act that prevents banks from "redlining" certain neighborhoods, refusing to serve those areas is: A. the National Banking Act. B. the Garn-St. Germain Act. C. the Financial Institutions Reform, Recovery and Enforcement Act. D. the Riegle-Neal Interstate Banking and Branching Efficiency Act. E. the Community Reinvestment Act.
E
J.C. Penney, and Sears provided are among leading firms that in the 1980s organized competitors with banks that are known as: A. nonbank financial-service institutions. B. discount security companies. C. savings institutions. D. credit unions. E. commercial banks.
A
Jonathan Robbins has an account in a bank that does not have a physical branch. Jonathan does all of his banking business over the Internet. What type of bank does Jonathan have his account at? A. Virtual Bank B. Mortgage Bank C. Community Bank D. Minority banks E. None of the options are correct.
A
One of the earliest theories regarding the impact of regulation on banks was developed by George Stigler. He contends that: A. firms in regulated industries actually seek out regulations because they bring monopolistic rents. B. regulations shelter firms from changes in demand and cost, lowering its risk. C. regulations can increase consumer confidence which increases customer loyalty to regulated firms. D. depository institutions should be regulated no differently than any other corporation with no subsidies or special privileges. E. None of the options are correct.
A
The Bank, N.A. accepts deposits from thousands of individuals and lends that money to (among others) the Stillwater Body Shop to expand their work bays. Which of the following roles is the bank performing? A. The intermediation role B. The payments role C. The risk management role D. The guarantor role E. The policy role
A
The First National Bank of Lakeland makes risky loans to businesses to expand and grow their businesses while at the same time issuing low-risk securities to their depositors and other fund providers. Which of the following services is this bank offering to their customers? A. Risky arbitrage services B. Liquidity services C. Delegated monitoring services D. Divisibility of money services E. Credit services
A
The _________ allows adequately capitalized bank holding companies to acquire banks in any state. A. Riegle-Neal Interstate Banking and Branching Efficiency Act B. Competitive Equality Banking Act C. Financial Institutions Reform, Recovery and Enforcement Act D. Federal Deposit Insurance Corporation Improvement Act E. Depository Institutions Deregulation and Monetary Control Act
A
The federal law that prohibited federally supervised commercial banks from offering investment banking services on privately issued securities is known as: A. the Glass-Steagall Act. B. the Bank Merger Act. C. the Depository Institutions Deregulation and Monetary Control Act. D. the Federal Reserve Act.
A
The law that set up the federal banking system and provided for the chartering of national banks was the: A. National Bank Act. B. McFadden Act. C. Glass-Steagall Act. D. Bank Merger Act. E. A. Federal Reserve Act.
A
The oldest federal bank agency is the: A. Office of the Comptroller of the Currency. B. Federal Deposit Insurance Corporation. C. Federal Reserve System. D. state banking commission. E. state insurance commission.
A
The phenomenon of convergence refers to: A. financial service firms expanding into other product lines. B. firms reducing their product lines. C. bank merger activity. D. globalization in banking. E. technological innovation in banking.
A
The view that depositors hire banks to analyze the financial condition of prospective borrowers and continually evaluate the condition of outstanding loans is referred to as: A. delegated monitoring. B. the concept of financial intermediation. C. the liquidity function in banking. D. market imperfection theory. E. the efficiency contribution of banking.
A
Which federal banking act prohibits publishing false or misleading information about the financial performance of a public company and requires top corporate officers to vouch for the accuracy of their company's financial statements? A. The Sarbanes-Oxley Act B. The USA Patriot Act C. The Check 21 Act D. The Fair and Accurate Credit Transactions Act E. The Bankruptcy Abuse Prevention and Consumer Protection Act
A
Which of the following activities do the banks perform as dealers in arranging for risk protection for customers from third parties? A. Hedging services B. Merchant banking services C. Investment banking services D. Mutual funds services E. Security underwriting services
A
Which of the following acts created a Financial Stability Oversight Council to dampen systemic risk? A. The Dodd-Frank Regulatory Reform Act B. The Sarbanes-Oxley Act C. The Garn-St Germain Depository Institutions Act D. The Gramm-Leach-Bliley Act E. The Financial Institutions Reform, Recovery and Enforcement Act
A
Which of the following created the Truth in Savings Act? A. The FDIC Improvement Act B. The International Banking Act C. The Sarbanes-Oxley Act D. The Gramm-Leach-Bliley Act E. The Financial Institutions Reform, Recovery and Enforcement Act
A
Which of the following has become the principal tool of central bank monetary policy today? A. Open market operations B. Functional regulation C. Umbrella supervision and regulation D. Margin requirement E. None of the options are correct.
A
Which of the following is not a purpose of bank regulation? A. Guarantee minimal profitability of the banking system B. Provide monetary stability C. Ensure safety and soundness of banks D. Provide competitive financial system E. Protect consumers from abuses of banks
A
_____ allows European and foreign banks greater freedom to cross national borders. A. The European Monetary Union B. The European Council C. The Sarbanes-Oxley Act D. The Garn-St Germain Depository Institutions Act E. The Gramm-Leach-Bliley Act
A
Drew Davis goes to his local bank to get help developing a financial plan and making investment decisions. Which of the more recent services banks offer is Drew taking advantage of? A. Getting a consumer loan B. Getting financial advice C. Managing cash D. Getting venture capital services E. Buying a retirement plan
B
A bank which manages the investment portfolio and pays the bills of an elderly customer who is unable to do it for him or herself is carrying out the __________ of banks. A. intermediation role B. payment role C. guarantor role D. agency role E. policy role
D
A company which owns stocks of three different banks is categorized as a(n): A. unit bank. B. interstate bank. C. investment bank. D. multi-bank holding company. E. None of the options are correct.
D
Common minimum capital requirements on banks in leading industrialized nations that are based on the riskiness of their assets is imposed by: A. the National Banking Act. B. the Financial Institutions Reform, Recovery and Enforcement Act. C. the International Banking Act. D. the Basel Agreement. E. None of the options are correct.
D
Early European banks were places for safekeeping of wealth because: A. loans to the poor often carried high interest rates. B. loans and deposits were primarily for wealthy customers. C. the industrial revolution demanded new methods of making payments and obtaining credit. D. savings and wealth were lost due to war, theft, and expropriation by governments. E. All of the above are correct options
D
Jonathan Wynn knows that if he wanted to purchase a Treasury Bill, the minimum amount he would spend would be close to $10,000. He also knows that he could deposit $1,000 in a money market deposit account at a bank and earn about the same rate of interest. Jonathan does not have $10,000 to invest in a Treasury Bill. If Jonathan puts his money in the bank, which service that a bank can provide, is he taking advantage of? A. Risky arbitrage services B. Liquidity services C. Delegated monitoring services D. Divisibility of money services E. Credit services
D
Which federal banking act requires that financial service providers establish the identity of customers opening new accounts? A. the Sarbanes-Oxley Act B. the USA Patriot Act C. the Check 21 Act D. the Fair and Accurate Credit Transactions Act E. the Bankruptcy Abuse Prevention and Consumer Protection Act
B
Which of the following is a type of nonbank businesses a bank holding company can own? A. Retail Computer Store B. Security Brokerage Firm C. Retail Grocery Store D. Wholesale Electronic Distribution Company E. All the options are correct
B
Which of the following is an example of a commercial bank? A. State and local government retirement funds B. Foreign banking offices in the United States C. Finance and mortgage companies D. Property/casualty and other insurers E. Mutual funds
B
Which of the following is charged with setting policies and overseeing the performance of a bank? A. Stockholders B. Board of directors C. Regulators D. Depositors E. None of the options are correct
B
Which of the following is not a current trend in the banking industry? A. The number of banks is declining B. The number of bank branches is declining C. The number of bank services is increasing D. The number of bank competitors is increasing E. Bank industry convergence
B
A typical branch banking organization: A. has complete centralization of authority. B. has complete decentralization of authority. C. has partial decentralization of authority. D. is completely operated by regulators. E. is completely operated by shareholders.
C
Alexander Phua goes to his local bank and gets an insurance policy that protects him against loss in case he is in a car accident. Which of the following roles is the bank performing? A. The intermediation role B. The payments role C. The risk management role D. The guarantor role E. The policy role
C
An institutional arrangement in which federal and state authorities both have significant bank regulatory powers is referred to as: A. balance of power. B. federalism. C. dual banking system. D. cooperative regulation. E. coordinated control.
C
As per the National Currency and Bank Acts, the comptroller of currency ensures that every national bank is examined by a team of federal examiners at least: A. twice in a year. B. once in 3 months. C. once every 12 to 18 months. D. once every 9 to 12 months. E. once in a month.
C
Banks like the Medici Bank in Italy and the Hochstetter Bank in Germany were successful because __________ and they responded well to these new needs. A. the poor needed loans at high interest rates B. primarily wealthy customers needed loans and deposits C. the Industrial Revolution demanded new methods of making payments and obtaining credit D. people needed to protect their savings and wealth from the government E. All of the options are correct.
C
Banks perform the indispensable task of: A. creating money without making loans. B. absorbing the excess liquidity created by other financial institutions. C. intermediating between surplus-spending parties and deficit-spending parties. D. issuing risky deposits. E. None of the options are correct
C
In banking, organizational form follows _________, because banks usually are organized in such a way as to carry out the tasks and supply the services demanded of them. A. bank size B. management's decision C. function D. regulation E. location
C
In the United States, a commercial bank qualifies as a "bank" under federal law if it offers: A. consumer installment loans, CDs. B. trust services, commercial loans. C. checking accounts, commercial loans. D. security investments, inventory loans to business customers. E. commercial deposit accounts, consumer savings plans.
C
Which of the following is considered a depository financial institution? A. Mortgage company B. Private pension funds C. Savings and Loan associations D. Money market funds E. Insurance company
C
Which of the following reasons leads to an implication that traditional banking is dying? A. Decrease in number of branches B. Increased restructuring of loans C. Degradation of market share D. Reduction of public trust and confidence in the system. E. Increase in risky arbitrage services
C
MyWebCast is a new company that makes it easy for individuals to create streaming videos on the Internet to share with friends and family for a small fee. MyWebCast wants to expand their offerings of video streaming services but needs cash to be able to do this. The Second National Bank of Oklahoma City, through a subsidiary, gives them the cash they need for an ownership share in the company. Which of the more recent services that banks offer is MyWebCast taking advantage of? A. Getting a consumer loan B. Getting financial advice C. Managing cash D. Getting venture capital services E. Buying a retirement plan
D
Which of the following is one of the few states that has opted out of interstate banking? A. New York B. Ohio C. Texas D. Montana E. None of the options are correct
D
Which of the following types of banks would most likely offer the largest number of financial services virtually? A. A retail bank B. A community bank C. A commercial bank D. A universal bank E. An international bank
D
Which one of the following nonbank financial-service institutions sell shares to the public representing an interest in a professionally managed pool of stocks, bonds, and other securities? A. Security brokers and dealers B. Investment banks C. Finance companies D. Mutual funds E. Hedge funds
D
Wholesale banks are those banks that: A. sell at a discount relative to all commercial banks. B. only make loans to the wholesale industry. C. lend almost exclusively to farmers. D. serve corporations and government. E. have only retail customers.
D
A bank that wires funds for the purchase of a beach house in South Carolina for a customer in Oklahoma is carrying out the __________ of banks. A. intermediation role B. payment role C. guarantor role D. agency role E. policy role
A
As per the Gramm-Leach-Bliley Act, one of the ways through which a banking-insurance-securities affiliation can take place is through: A. a financial holding company. B. the state insurance commissions. C. the European Central Bank. D. a financial service corporation. E. a financial modernization organization.
A
During the middle ages, banks encountered religious opposition because: A. loans to the poor often carried high interest rates. B. loans and deposits were primarily for wealthy customers. C. the Industrial Revolution demanded new methods of making payments and obtaining credit. D. savings and wealth were lost due to war, theft, and expropriation by governments. E. All of the options are correct.
A
A bank that wires funds for the purchase of a beach house in South Carolina for a customer in Oklahoma is carrying out the __________ of banks. A. intermediation role B. payment role C. guarantor role D. agency role E. policy role
B
A study of history shows that one of the first services offered by banks was: A. equipment leasing. B. currency exchange. C. security brokerage and underwriting. D. sale of real estate. E. None of the options are correct
B
Bank equipment leasing activity involves: A. a bank leasing its office facilities instead of buying. B. a bank buying equipment and then leasing the item to a customer. C. a customer buying equipment and then leasing it to a bank. D. a bank leasing computer equipment. E. None of the options are correct.
B
Before offering any financial service to the public, a bank in the United States must have a: A. certificate of deposit insurance. B. charter of incorporation. C. list of established customers. D. new building constructed to be the bank's permanent home. E. None of the options are correct.
B
Chris Jones gets a cashier's check from Wachovia Bank to make his down payment on a new home. Which of the following roles is the bank performing? A. The intermediation role B. The payments role C. The risk management role D. The guarantor role E. B. The policy role
B
Major trends affecting the performance of financial firms today include all of these except: A. greater product-line diversification. B. reduced branching. C. geographic diversification. D. convergence. E. increasing automation.
B
Of the principal reasons for regulating banks, what was the primary purpose of the Federal Reserve Act of 1913? A. Establishment of a network to clear and collect checks B. Control of the money supply C. Preventing banks from realizing monopoly powers D. Ensuring an adequate and fair supply of loans E. None of the options are correct.
B
Religious opposition decreased during the Renaissance because: A. loans to the poor often carried high interest rates. B. loans and deposits primarily consisted of wealthy customers. C. the Industrial Revolution demanded new methods of making payments and obtaining credit. D. savings and wealth were lost due to war, theft, and expropriation by governments. E. All of the options are correct.
B
Samuel Peltzman had a different view to George Stigler on the impact of regulation on banks. He contends that: A. firms in regulated industries actually seek out regulations because they bring monopolistic rents. B. regulations shelter firms from changes in demand and cost, lowering its risk. C. regulations can increase consumer confidence which increases customer loyalty to regulated firms. D. depository institutions should be regulated no differently than any other corporation with no subsidies or special privileges. E. None of the options are correct.
B
Smaller, locally focused commercial and savings banks that offer narrower but more personalized menu of financial services are known as: A. money-center banks. B. community banks. C. mutual funds. D. state banks. E. fringe banks.
B
The Charleston Southern Bank makes loans for families to purchase new and existing homes but does not take deposits. What type of bank is this most likely to be? A. Virtual Bank B. Mortgage Bank C. Community Bank D. Merchant banks E. None of the options are correct.
B
The Federal Reserve buys Treasury Bills in the open market. This will tend to: A. decrease the price of treasury bills. B. increase the available for use funds with banks and dealers involved in the transaction. C. cause reserves held at the Federal Reserve to decrease. D. cause a decrease in the growth of deposits and loans. E. All of the options are correct.
B
The Federal Reserve policy tool under which the Fed attempts to bring psychological pressure to bear on individuals and institutions to conform to the Fed's policies using letters, phone calls, and speeches is known as: A. margin requirement. B. moral suasion. C. discount window supervision. D. conference and compromise. E. None of the options are correct.
B
The Gramm-Leach-Bliley Act (Financial Services Modernization Act) calls for linking the government supervision of the financial-services firm to the types of activities that the firm undertakes. For example, the insurance portion of the firm would be regulated by state insurance commissions and the banking portion of the firm would be regulated by banking regulators. This approach to government supervision of financial services is known as: A. consolidated regulation and supervision. B. functional regulation. C. government reregulation. D. umbrella supervision and regulation. E. None of the options are correct.
B
The concentration of U.S. bank deposits in the hands of the largest banks has _________ recently. A. declined B. increased C. remained essentially unchanged D. exhibited large fluctuations in both directions E. None of the options are correct
B
The federal agency that regulates the most banks is the: A. Office of the Comptroller of the Currency. B. Federal Deposit Insurance Corporation. C. Federal Reserve System. D. state banking commission. E. state insurance commission.
B
Of the principal reasons for regulating banks, what was the primary purpose of the National Banking Act (1863)? A. Separation of commercial and investment banking B. Separation of commercial banking and insurance activities C. Chartering new banks and examining existing ones D. Establishment of a network to clear and collect checks E. Preventing banks from realizing monopoly powers
C
The Bartholemew Bakery receives a lot of payments in cash. They deposit it in their local bank who invests the money in an interest bearing account until it is needed to pay bills. Which of the financial services banks offer, is the Bartholemew bakery taking advantage of? A. Getting a consumer loan B. Getting financial advice C. Managing cash D. Getting venture capital services E. Buying a retirement plan
C
The Edmond National Bank serves only the City of Edmond, Oklahoma and concentrates on providing the best possible service to this city. What type of bank is this most likely to be? A. Virtual Bank B. Mortgage Bank C. Community Bank D. Bankers' banks E. None of the options are correct.
C
The European Central Bank has the main goal of: A. ensuring that commercial and investment banks are separated. B. keeping unemployment low. C. ensuring price stability. D. ensuring an adequate and fair supply of loans. E. All of the above options are correct.
C
The act that allowed bank holding companies to acquire nonbank depository institutions and convert them to branches is: A. the National Banking Act. B. the Garn-St Germain Act. C. the Financial Institutions Reform, Recovery and Enforcement Act. D. the Riegle-Neal Interstate Banking and Branching Efficiency Act. E. None of the options are correct.
C
The banking services that include marketing new securities to raise funds for corporations and other institutions is referred to: A. comprehensive packaging. B. wrap-around accounts. C. investment banking. D. professional banking. E. None of the options are correct.
C
The law that made bank and nonbank depository institutions more alike in the services they could offer and allowed banks and thrifts to more fully compete with other financial institutions is: A. the National Banking Act. B. the Federal Reserve Act. C. the Garn-St Germain Depository Institutions Act. D. the Riegle-Neal Interstate Banking and Branching Efficiency Act. E. the Gramm-Leach-Bliley Act (Financial Services Modernization Act).
C
Which federal banking act reduces the need for banks to transport paper checks across the country? A. The Sarbanes-Oxley Act B. The USA Patriot Act C. The Check 21 Act D. The Fair and Accurate Credit Transactions Act E. The Bankruptcy Abuse Prevention and Consumer Protection Act
C
Of the principal reasons for regulating banks, what was the primary purpose of the Consumer Credit Protection Act? A. Establish a network to clear and collect checks B. Control of the money supply C. Prevent banks from realizing monopoly powers D. Ensure that customers are aware of their rights and responsibilities under a loan agreement E. None of the options are correct.
D
The 1994 law that allowed bank holding companies to acquire banks anywhere in the U.S. is: A. the Glass-Steagall Act. B. the Federal Deposit Insurance Corporation Improvement Act. C. the National Bank Act. D. the Riegle-Neal Interstate Banking and Branching Efficiency Act. E. None of the options are correct. D.
D
The Edmond Wine and Cheese shop wants to buy 30 cases of French Champagne on credit. Bank of America writes a letter of credit stating that the Edmond Wine and Cheese shop is a good risk and that if they do not pay off the loan, Bank of America will. Which of the following roles is the bank performing? A. The intermediation role B. The payments role C. The risk management role D. The guarantor role
D
The Financial Services Regulatory Relief Act of 2006: A. adds selected new service powers to depository institutions. B. loosens regulations on depository institutions. C. grants the Federal Reserve authority to pay interest on depository institutions' legal reserves. D. All of the options are correct. E. None of the options are correct.
D
The act which requires financial institutions to share information about customer identities with government agencies is: A. the Sarbanes-Oxley Act. B. the National Banking Act. C. the Garn-St Germain Depository Institutions Act. D. the USA Patriot Act. E. the Gramm-Leach-Bliley Act.
D
The equivalent of the Federal Reserve System in Europe is known as the: A. European Union. B. Bank of London. C. European Council. D. European Central Bank. E. Swiss Bank Corporation.
D
The law which lifted government deposit interest ceilings in favor of competitive interest rates is: A. the National Bank Act. B. the Glass-Steagall Act. C. the Bank Merger Act. D. the Depository Institutions Deregulation and Monetary Control Act. E. None of the options are correct.
D
There is an important debate raging today regarding whether banks should be regulated at all. George Benston contends that: A. firms in regulated industries actually seek out regulations because they bring monopolistic rents. B. regulations shelter firms from changes in demand and cost, lowering its risk. C. regulations can increase consumer confidence which increases customer loyalty to regulated firms. D. depository institutions should be regulated no differently than any other corporation with no subsidies or special privileges. E. None of the above options are correct.
D
Which of the following is considered a fringe bank? A. Community Bank B. Wholesale Bank C. Merchant Bank D. Payday Lender E. None of the options are correct.
D
The Emergency Economic Stabilization Act passed in 2008 during the global credit crisis, allowed for: A. an emergency sale of "bad assets." B. a temporary increase of FDIC deposit insurance to $250,000 for all deposits. C. injections of capital by the government into banks and other qualified lenders. D. a closer surveillance of the mortgage market participants, such as brokers and lenders. E. All of the options are correct.
E
The U.S. government wants to prevent money laundering by drug cartels. To promote this goal, they have asked banks to report any cash deposits greater than $10,000 to the government. Which of the following roles is the bank performing? A. The intermediation role B. The payments role C. The risk management role D. The guarantor role E. The policy role
E
The fastest growing financial crime in the U.S. is: A. financial statement misrepresentation. B. bank robberies. C. individual privacy violations. D. credit card fraud. E. identity theft.
E
The law that allows banks to affiliate with insurance companies and securities firms to form financial services conglomerates is: A. the National Bank Act. B. the Glass-Steagall Act. C. the Garn-St Germain Depository Institutions Act. D. the Riegle-Neal Interstate Banking Act. E. the Gramm-Leach-Bliley Act (Financial Services Modernization Act).
E
The principal functions and services offered by many financial-service firms today include: A. lending and investing money. B. making payments on behalf of customers to facilitate their purchases of goods and services. C. managing and protecting customers' cash and other property. D. assisting customers in raising and investing funds profitably. E. All of the above.
E
Which federal banking act extends deposit insurance coverage on qualified retirement accounts from $100,000 to $250,000 and authorizes the FDIC to periodically increase deposit insurance coverage to keep up with inflation? A. The Sarbanes-Oxley Act B. The Gramm-Leach-Bliley Act C. The Check 21 Act D. The Fair and Accurate Credit Transactions Act E. The Federal Deposit Insurance Reform Act
E
Which federal banking act forces more individuals to repay at least part of what they owe and will push higher-income borrowers into more costly forms of bankruptcy? A. The Sarbanes-Oxley Act B. The USA Patriot Act C. The Check 21 Act D. The Fair and Accurate Credit Transactions Act E. The Bankruptcy Abuse Prevention and Consumer Protection Act
E
Which of the following are the implied motivators of reforms that have taken place in the banking sector since the credit crisis of 2007-2009? A. Increased liquidity B. Increased dominance of the largest financial firms C. Increased disclosure of credit charges and other consumer expenses D. Increased number of bank branches E. Increased speed of innovation and invention
E
Which of the following has been an important trend regarding consolidation and geographic expansion in banks? A. Increased bank branching activity B. The formation of more holding companies to purchase smaller banks C. Mergers among some of the largest banks in the industry D. Significant rise in the average size of individual banks E. All of the options are correct
E
Which of the following is an unresolved issue in the new century? A. What should be done about the regulatory safety net set up to protect small depositors? B. If financial institutions are allowed to take on more risk, how can taxpayers be protected from paying the bill when more institutions fail? C. Does functional regulation actually work? D. Should regulators allow the mixing of banking and commerce? E. All of these are unresolved issues
E
Which of the following is considered to be an advantage of branch banking? A. Increased availability and convenience of services B. Decreased chance of failure C. Reduced transaction costs D. Decreased chance of failure and reduced transaction costs E. All the options are correct
E
Which of the following is one of the several advantages that bank holding company organizations have over other types of banking organizations? A. Greater access to capital markets B. Tax advantage C. Product-line diversification D. Ability to use higher leverage E. All the options are correct
E
_____ requires corporations controlling two or more banks to register with the Federal Reserve Board and seek approval for any new business acquisitions. A. The Glass-Steagall Act B. The Federal Deposit Insurance Corporation Improvement Act C. The National Bank Act D. The Riegle-Neal Interstate Banking and Branching Efficiency Act E. The Bank Holding Company Act
E