Exam 22: Product and Geographic Expansion

Large size is an important characteristic in international banking because it gives a bank a greater ability to diversify across borders.

The Glass-Steagall Act allowed commercial banks to underwrite new issues of Treasury securities.

The emergence of the Euro as a uniform medium of exchange is expected to cause the importance of the dollar to increase among major European countries.

If the firm commitment price is $15 and one million shares are sold in the primary market for $15.50 and then resold in the secondary market for $15.75, what is the underwriter's profit/loss?

Research suggests that the total risk exposure of a financial services organization could actually increase if there is excessive product expansion in some nonbank lines.

The following three FIs dominate a local market and their total assets are given below. Institution Asset Size Bank A \5 0 million Bank B \6 0 million Bank C \9 0 million Under the 1982 guidelines, would the Fed approve the merger of Banks A and B?

In the middle part of the twentieth century, large banks addressed the issue of interstate branch banking restrictions by forming multibank holding companies with bank subsidiaries in different states.

The European Community Second Banking Directive has aided the international competitive position of European banks by creating a single banking market in Europe.

The International Banking Act of 1978 attempted to provide a level playing field for domestic and foreign banks in U.S.banking markets.

Research on bank mergers for the decade of the 1990s found that improved performance of the merged bank occurred because of both revenue enhancements and cost reduction.

In recent years, commercial banks have attempted to expand their activities into nonbanking areas, but securities firms have not been interested in expanding into commercial banking.

The Financial Services Modernization Act of 1999 has provided for more standardized relationships among financial service sectors and commerce.

Concern about the improper transfer of inside information has been used to justify product segmentation on the grounds of

In late 2015, shadow banking activities came under federal government regulation.

How could insurance companies get around the restrictive provisions imposed by the bank holding company act of 1956?

Despite a sovereign debt problem that plagued Greece in 2010, by 2012 U.S.Banks had increased their exposure to Greek debt.

The first state in the U.S.to allow out of state acquisitions was

This legislation explicitly stated that banking and insurance were not closely related activities.

The following statements regarding the financial crisis are true EXCEPT

A foreign bank subsidiary in the U.S.is restricted to using only funds borrowed on the wholesale and money markets.