Exam 2: Financial Services: Depository Institutions

The movement of an off-balance-sheet asset or liability to an on-balance-sheet item is dependent on the occurrence of a contingent event.

Commercial banks have had limited power to underwrite corporate securities since 1987.

The securitization of mortgages involves the pooling of mortgage loans for sale in the financial markets.

Since 1990, commercial banks decreased the proportion of business loans and increased the proportion of mortgages in their portfolios.

Credit unions operate on a common bond principle which emphasizes the depository and lending needs of credit union members.

Which of the following is the most important source of funds for savings institutions?

Unlike commercial banks, credit unions may only be chartered in the state in which they operate.

Money center banks are considered to be any bank which

The largest asset class on FDIC-insured savings institutions' balance sheet as of mid-2015 was

Savings associations and savings banks both are insured by insurance funds that are managed by the FDIC.

Money market mutual funds have attracted large amounts of retail savings and retail time deposits from commercial banks in recent years.

Correspondent banking may involve

The growth in off-balance-sheet activities during the decade of the 1990s was due, in large part, to the use of derivative contracts.

Commercial banks in the U.S.often are subject to more than one of four regulatory agencies.

Nonbank banks are firms that undertake many of the activities of a commercial bank without meeting the legal definition of a bank.

Which of the following observations concerning trust departments is true?

As with other DIs, profits or return on assets (ROA) is the primary goal of credit union management.

The qualified thrift lender test is designed to ensure that

Savings associations and savings banks are chartered and regulated by the Federal Reserve Bank.

In general, the banking industry performed at higher levels of profitability in the decade of the 1990s than the decade of the 1980s.