Banking and Finance Final Study Set (1-13)

Generally speaking, housing costs should not exceed ____ of gross monthly income

25 to 28 percent

The risk posed by variation in exchange rates between countries is called

Currency risk

Debt/Income=

Debt ratio

Which of the following is a liability for a bank?

Deposits

Which of the following attempts to protect the information that credit bureaus may collect?

Fair credit reporting act

The official currency of the United States can properly be classified as

Fiat money

Which of these is not a suggested way to prevent check fraud

Have your social security number printed on your checks

Which of the following statements about HOEPA loans is not true

Lenders are prohibited from charging an APR that is 10 points higher than a rate on a treasury bill

Which of the following elements of the money supply, as defined by the federal reserve, can be spent immediately?

M1

Which of the following is not an element of negotiability

Must be payable on demand

Which of the following would probably not be considered an example of good customer service

Second national bank is open from 10 am until 3 pm. Monday through Thursday

Check 21 allows

Substitute checks to process checks electronically

In the United states, banks and _____ work together to form the banking system and to ensure the money supply is adequate, appropriate and trustworthy

The government

Money on deposit minus _____ can be loaned by banks to customers

The reserve requirement

Which of the following largely eliminated from the wide variation of legal regulation from the country's payments system

Uniform commercial code of 1958

A reverse mortgage is repaid

When the borrower dies

A legal claim a lender has on property to secure a debt is called

a lien

One big difference between a commercial bank and a mutual savings bank is that

a mutual savings bank is owned by depositors, not stockholders

The "a" in CAMELS stands for

asset adequacy

Which of the following endorsements is least secure

blank endorsement

Marisol has written a $500 check to stephen, but she has only $300 in her account and it is returned unpaid to stephen. Marisol has wirtten a

bounced check

The federal reserve influences the federal funds rate by

buying and selling government securities

Which of the following is most liquid

checking account

60 percent of the deposit and loan business in the United States is done by

commercial banks

Adding interest to the principal and paying interest on the new total is called paying

compound interest

If the government restricts the flow of cash into the economy too severely,

consumers cannot afford to borrow

Which of the following is title typically held by a bank officer

controller

A form of advertising that delivers advertising materials individually to a target market via the US mail or telemarketing is called

cybermarketing

Modern portfolio theory states that within any portfolio of investments deversification should include

d. A&C

Which of the following components of a fixed rate mortgage do not change?

d. all of the above

Which of the following directly transfers money from a person's account to the account of a retailer

debit card

The division of banks into departments is called

departmentalization

Which of the following government documents list interest rates in effect at the time for various types of accounts?

deposit rate schedules

The interest rate the Federal Reserve charges for loans to member banks is called the

discount rate

The person who signs the draft is the

drawer

The physical security of a bank includes all of the following except

employee friendliness

Total assets minus liabilities equals

equity

Which of the following types of lending accounts for the largest dollar market

government lending

All of the following are considered installment loans except

lines of credit

The risk that a bank will have to sell its assets at a loss to meet its cash demands is called

liquidity risk

The demand for a given currency will be strong if all of the following factors are present except

low interest rates

Which of the following is not the typical duty of a bank teller

manage large sums of money placed in trust with the bank according to clients' wishes

Concealing unlawfully gained funds by converting them into seemingly legitimate income is called

money laundering

One result of competition among banks is that

more services available to customers

The most economical advertising medium available to most businesses is

newspaper

Most short-term business loans are for

one year or less

Which of the following accounts are you least likely to encounter at a modern bank

passbook savings account

Which of the following elements of the FICO credit-scoring system carries the most weight?

payment history

The final step of the mortgage approval process is

recording

Which of the following would be considered a secondary reserve for a bank?

securities the bank has purchased from the federal government

The emergency banking act of 1933

separated commercial banking investment banking to protect assets

Documentation of most credit problems stays in a consumer's file for at least

seven years

The type of business insurance that pays for medical care and physical rehabilitation of workers injured on the job is called

short term disability

This is the least common type of bank robbery

takeover robbery

Which of the following statements about open-end loans is true

the longer you use the money, the more you pay

Which of the following features of a check indicates who is to receive the funds?

the payee

Which of the following is not considered a factor in money creation?

the printing of currency by the bureau of engraving and printing

The real estate settle procedure act was enacted

to protect consumers from hidden costs at closing time

The 9 digit number printed on a check that identifies the bank that holds the checking account and is responsible for payment is called the

transit number

An instrument given by a bank on behalf of a buyer to pay back the bank of the seller a given sum in a given time is called

letter of credit

Which of the following is not a time deposit?

Checking Account

The largest denomination of paper currency in the united states today is the

100

Columbia bank has targeted teenagers as a political market. Which of the following is probably an inappropriate advertising campaign for Columbia to use?

Ads that promote low mortgage rates and hoe equity loans

The first thing you should do when a problem arrises with a customer is to

Apologize for the situation

This bank department provides financial and investment services to individuals and institutions

Brokerage department

Which of these elements is part of an illegal house flipping scheme?

Buying a house for below market value and selling it at or above market value. A fraudulent appraisal that artificially inflates the value of the house.

Which of the following is not a functional department of a bank?

Human resources department

Which of the following is not an example of an agency that is focused on making banking safe and mutually beneficial across international borders

President's Working group on financial markets

Which of the following four P's of marketing

Pricing

Which of the following is not part of the on-going organizational structure of the federal reserve

Primary Dealer credit facility

Which of the following would a business probably not finance by a term loan?

increasing inventory

The rate to which a lender's interest rate is tied is called the...

index

Which of the following interest rates is linked to some other rate?

indexed rate

"talking down" to a customer

is likely to insult and embarrass the customer

A public employment event at which a bank can present employment opportunities to a large number of people at one time is called a

job fair