Principles of Banking Chapters 1-2
How many affiliates are held within Central Bancompany?
13
A corporation that owns or controls one or more banks is a(n):
Bank holding company
What tool is used by the Federal Reserve to control the money supply?
Changing the discount rate
What federal law requires federal bank regulators to periodically evaluate how financial institutions meet the credit needs of their communities?
Community Reinvestment Act (CRA)
What new federal agency was created by the Dodd-Frank Act?
Consumer Financial Protection Bureau (CFPB)
What restrictions of gift card expiration dates and inactivity fees were imposed by the:
Credit CARD Act
What is an example of a financial intermediary
Credit union
A __________ bank has been in operation for 5 years or less
De novo
What is the interest rate the Federal Reserve charges banks for the short-term use of its funds?
Discount rate
Because banks can be chartered by either a state or the federal government, the United States has a ______________ system.
Dual banking
The difference between assets and liabilities is:
Equity
_________ are the principles of conduct and judgement that affect business practices.
Ethics
T or F CBOLO has 12 Legendary Service Standards
F
T or F Capital ratio measures the rate of return bank has achieved in relation to funds invested.
F
T or F Market risk is the possibility that a borrower will not repay the principal and interest of a loan when due.
F
T or F Stocks are a preferred product for high-end savers
F
What was a factor in causing the Great Depression?
Failure of accounting and auditing standards
What supervises nonmember state banks?
Federal Deposit Insurance Corporation (FDIC)
Drafts of regulations are published in the:
Federal Register
What government entity buys and sells securities in open-market operations?
Federal Reserve Bank of New York
The annual financial report that public companies file with the SEC is called the:
Form 10-k
What specializes in cashing checks for a fee?
Money service business
The future of banking will likely include:
More innovation
What measures how well the interest received on loans offsets and exceeds the interest paid on deposits?
Net interest income
The risk that the market value of a security or other asset will decrease because of interest rate changes and other market conditions is called ____________.
Price risk
Cash on hand, demand deposit balances at correspondent banks, and reserves kept at the Fed are examples of ________.
Primary reserves
What does PATCCI stand for?
Prompt Attention Treat Courteously with Correct Information
What law was passed by Congress to restore investor confidence in publicly help corporations?
Sarbanes-Oxley Act (SOX)
T or F Longer-term deposits are used to fund 30-year loans to purchase homes.
T
T or F Money Market funds invest in short-term instruments only.
T
T or F Profit and loss statement is a summary of revenue, expenses, and net income earned by a company during a stated period, such as a quarter or a year.
T
T or F The National Bank Act established a reserve requirement to meet depositor withdrawals.
T
The Chief risk with a loan is:
credit risk
What is the ability of a bank or business to meet its current obligations called?
liquidity
Fees and service charges are examples of ________ income
non-interest
