What is the market share of Bank 3? \[\begin{array} { | c | r | } \hline \text { Bank } & \text { Asset Size } \\ \hline 1 & \text { \$100 million } \\ \hline 2 & \text { \$200 million } \\ \hline 3 & \text { \$500 million } \\ \hline \end{array}\]

A) 12.5 percent. B) 37.5 percent. C) 25.0 percent. D) 62.5 percent. E) 50.0 percent. A) 12.5 percent. B) 37.5 percent. C) 25.0 percent. D) 62.5 percent. E) 50.0 percent.

How do you think the Department of Justice (DOJ) would characterize this market before the merger and which merger is more likely to be approved? \[\begin{array} { | c | r | } \hline \text { Bank } & \text { Asset Size } \\ \hline 1 & \text { \$100 million } \\ \hline 2 & \text { \$200 million } \\ \hline 3 & \text { \$500 million } \\ \hline \end{array}\]

A) This is a competitive market and either merger will be acceptable to the DOJ. B) This is a concentrated market and neither merger will be acceptable to the DOJ. C) This is a concentrated market, but the merger between Banks 1 and 3 is more likely to be acceptable to the DOJ. D) This is a competitive market, but the merger between Banks 1 and 2 is more likely to be acceptable to the DOJ. E) This is a moderately concentrated market, but the merger between Banks 1 and 3 is more likely to be acceptable to the DOJ. A) This is a competitive market and either merger will be acceptable to the DOJ. B) This is a concentrated market and neither merger will be acceptable to the DOJ. C) This is a concentrated market, but the merger between Banks 1 and 3 is more likely to be acceptable to the DOJ. D) This is a competitive market, but the merger between Banks 1 and 2 is more likely to be acceptable to the DOJ. E) This is a moderately concentrated market, but the merger between Banks 1 and 3 is more likely to be acceptable to the DOJ.

If Bank 1 is acquired by Bank 3, what is the impact on the market's HHI? \[\begin{array} { | c | r | } \hline \text { Bank } & \text { Asset Size } \\ \hline 1 & \text { \$100 million } \\ \hline 2 & \text { \$200 million } \\ \hline 3 & \text { \$500 million } \\ \hline \end{array}\]

A) An increase in the HHI of 1600. B) An increase in the HHI of 624. C) An increase in the HHI of 1563. D) A decrease in the HHI of 222. E) A decrease in the HHI of 360. A) An increase in the HHI of 1600. B) An increase in the HHI of 624. C) An increase in the HHI of 1563. D) A decrease in the HHI of 222. E) A decrease in the HHI of 360.

Exam 22: Product and Geographic Expansion

The Garn-St Germain Act is an interstate banking law that allows banks to branch on an interstate basis rather than building more expensive holding company structures.

(True/False)

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(38)

Question 61

The argument that mergers are valuable because they create revenue synergies is based on

(Multiple Choice)

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Question 62

In firm commitment underwriting, the underwriter's spread is

(Multiple Choice)

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Question 63

The conflict of interest that occurs when a bank suggests the issuance of capital market debt for the purpose of reducing bank loans under conditions of deteriorating or questionable firm financial health is commonly referred to as bankruptcy risk transference.

(True/False)

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Question 64

What are the ways in which an FI can establish a global or international presence?

(Multiple Choice)

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Question 65

The Financial Services Modernization Act of 1999

(Multiple Choice)

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Question 66

What is the market share of Bank 3? Bank Asset Size 1 \1 00 million 2 \2 00 million 3 \5 00 million

(Multiple Choice)

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Question 67

A bank holding company must obtain the approval of the Fed before acquiring more than _____ of the shares of an additional bank, bank holding company, or financial services firm.

(Multiple Choice)

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Question 68

By the early 1990s interstate banking pacts basically had opened the doors for nearly all banks to practice interstate branching in any geographic locations.

(True/False)

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Question 69

If the firm commitment price is $15 and one million shares are sold in the primary market for $13 and then resold in the secondary market for $13.25, what is the underwriter's profit/loss?

(Multiple Choice)

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Question 70

One result of the FBSEA was the increase in the regulatory burden of foreign banks in the U.S.

(True/False)

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(31)

Question 71

The economic value of narrowly defined bank franchises has declined because

(Multiple Choice)

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Question 72

The realization of revenue synergies from the acquisition of a bank may come

(Multiple Choice)

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Question 73

A one bank holding company is a parent bank holding company with only one subsidiary involved in banking activities.

(True/False)

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Question 74

A fully integrated universal bank allows a bank to engage in securities activities only through a separately owned securities affiliate.

(True/False)

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Question 75

According to economists, this is the main reason for underpricing of new issues.

(Multiple Choice)

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Question 76

How do you think the Department of Justice (DOJ) would characterize this market before the merger and which merger is more likely to be approved? Bank Asset Size 1 \1 00 million 2 \2 00 million 3 \5 00 million

(Multiple Choice)

4.8/5

(37)

Question 77

The safety and soundness of a holding company that has both a bank subsidiary and a securities affiliate can be enhanced over time by the product diversification benefits of a more stable earnings stream caused by having well-diversified financial services.

(True/False)

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Question 78

U.S.banking offices abroad normally are permitted by the Federal Reserve System to engage in activities that are allowed in the foreign country even when such activities are not permitted in the U.S.

(True/False)

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(41)

Question 79

If Bank 1 is acquired by Bank 3, what is the impact on the market's HHI? Bank Asset Size 1 \1 00 million 2 \2 00 million 3 \5 00 million

(Multiple Choice)

4.7/5

(33)

Question 80

Showing 61 - 80 of 160

Exam 22: Product and Geographic Expansion

The Garn-St Germain Act is an interstate banking law that allows banks to branch on an interstate basis rather than building more expensive holding company structures.

The argument that mergers are valuable because they create revenue synergies is based on

In firm commitment underwriting, the underwriter's spread is

The conflict of interest that occurs when a bank suggests the issuance of capital market debt for the purpose of reducing bank loans under conditions of deteriorating or questionable firm financial health is commonly referred to as bankruptcy risk transference.

What are the ways in which an FI can establish a global or international presence?

The Financial Services Modernization Act of 1999

What is the market share of Bank 3? Bank Asset Size 1 \1 00 million 2 \2 00 million 3 \5 00 million

A bank holding company must obtain the approval of the Fed before acquiring more than _____ of the shares of an additional bank, bank holding company, or financial services firm.

By the early 1990s interstate banking pacts basically had opened the doors for nearly all banks to practice interstate branching in any geographic locations.

If the firm commitment price is $15 and one million shares are sold in the primary market for $13 and then resold in the secondary market for $13.25, what is the underwriter's profit/loss?

One result of the FBSEA was the increase in the regulatory burden of foreign banks in the U.S.

The economic value of narrowly defined bank franchises has declined because

The realization of revenue synergies from the acquisition of a bank may come

A one bank holding company is a parent bank holding company with only one subsidiary involved in banking activities.

A fully integrated universal bank allows a bank to engage in securities activities only through a separately owned securities affiliate.

According to economists, this is the main reason for underpricing of new issues.

How do you think the Department of Justice (DOJ) would characterize this market before the merger and which merger is more likely to be approved? Bank Asset Size 1 \1 00 million 2 \2 00 million 3 \5 00 million

The safety and soundness of a holding company that has both a bank subsidiary and a securities affiliate can be enhanced over time by the product diversification benefits of a more stable earnings stream caused by having well-diversified financial services.

U.S.banking offices abroad normally are permitted by the Federal Reserve System to engage in activities that are allowed in the foreign country even when such activities are not permitted in the U.S.

If Bank 1 is acquired by Bank 3, what is the impact on the market's HHI? Bank Asset Size 1 \1 00 million 2 \2 00 million 3 \5 00 million

Why Are Financial Institutions Special

Financial Services: Depository Institutions

Financial Services: Finance Companies

Financial Services: Securities Brokerage and Investment Banking

Financial Services: Mutual Funds and Hedge Funds

Financial Services: Insurance

Risks of Financial Institutions

Interest Rate Risk I

Interest Rate Risk II

Credit Risk: Individual Loan Risk

Credit Risk: Loan Portfolio and Concentration Risk

Liquidity Risk

Foreign Exchange Risk

Sovereign Risk

Market Risk

Off-Balance-Sheet Risk

Technology and Other Operational Risks

Fintech Risks

Liability and Liquidity Management

Deposit Insurance and Other Liability Guarantees

Capital Adequacy

Futures and Forwards

Options, Caps, Floors, and Collars

Swaps

Loan Sales

Securitization

Filters