Question 1

_______________ provide loans directly to consumers and businesses and help borrowers obtain mortgage loans on real property.

Accepted Answer

A)  banks 
B)  securities firms 
C)  pension funds 
D)  finance firms 
A)  banks 
B)  securities firms 
C)  pension funds 
D)  finance firms D

Question 2

Major types of securities firms include all of the following except

Accepted Answer

A)  investment companies. 
B)  pension funds. 
C)  brokerage firms. 
D)  investment banking companies. 
A)  investment companies. 
B)  pension funds. 
C)  brokerage firms. 
D)  investment banking companies. B

Question 3

__________________ accept and invest individual savings and also facilitate the sale and transfer of securities between investors.

Accepted Answer

A)  Securities firms 
B)  Pension funds 
C)  Asset management companies 
D)  Mortgage banking firms 
A)  Securities firms 
B)  Pension funds 
C)  Asset management companies 
D)  Mortgage banking firms A

Question 4

_______________ sell or market new securities issued by businesses to individual and institutional investors, whereas ______________ firms assist individuals who want to purchase new or existing securities issues or who want to sell previously purchased securities.

Accepted Answer

A)  Brokerage firms, investment banks 
B)  Investment banks, brokerage firms 
C)  savings banks, investment banks 
D)  Brokerage firms, savings banks 
A)  Brokerage firms, investment banks 
B)  Investment banks, brokerage firms 
C)  savings banks, investment banks 
D)  Brokerage firms, savings banks

Question 5

One of the most significant advantages claimed by branch banking is

Accepted Answer

A)  lower interest rates are usually available from branch bank. 
B)  convenience for customers. 
C)  banking operations are easier to regulate. 
D)  it allows more banks to be chartered. 
A)  lower interest rates are usually available from branch bank. 
B)  convenience for customers. 
C)  banking operations are easier to regulate. 
D)  it allows more banks to be chartered.

Question 6

Mortgage banking firms provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes.

Accepted Answer

A) True 
 B)False

Question 7

Mutual funds are open-end investment companies that can issue an unlimited number of shares to its investors and use the pooled proceeds to purchase corporate and government securities.

Accepted Answer

A) True 
 B)False

Question 8

The effective rate of interest is generally lower on a standard loan than an otherwise equivalent discount loan.

Accepted Answer

A) True 
 B)False

Question 9

Savings and loan associations are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit.

Accepted Answer

A) True 
 B)False

Question 10

The _______________________ provided for separation of commercial banking and investment banking activities in the United States.

Accepted Answer

A)  Glass Steagall Act 
B)  Gramm-Leach-Bliley Act 
C)  Garn-Saint Germain Act 
D)  Depository Institutions Deregulation and Monetary Control Act 
A)  Glass Steagall Act 
B)  Gramm-Leach-Bliley Act 
C)  Garn-Saint Germain Act 
D)  Depository Institutions Deregulation and Monetary Control Act

Question 11

Major types of depository institutions include all of the following except

Accepted Answer

A)  commercial banks. 
B)  savings and loan associations. 
C)  credit unions. 
D)  brokerage firms. 
A)  commercial banks. 
B)  savings and loan associations. 
C)  credit unions. 
D)  brokerage firms.

Question 12

The Glass-Steagall Act of 1933 provided for separation of commercial banking and investment banking activities in the United States.

Accepted Answer

A) True 
 B)False

Question 13

The First Bank of the United States

Accepted Answer

A)  is still in operation in Massachusetts. 
B)  transferred funds from region to region. 
C)  was unchartered. 
D)  became the Bank of America. 
A)  is still in operation in Massachusetts. 
B)  transferred funds from region to region. 
C)  was unchartered. 
D)  became the Bank of America.

Question 14

The primary purpose of which Act was to aid the savings and loan industry?

Accepted Answer

A)  Garn-St. Germain Depository Institutions Act 
B)  Glass-Steagall Act 
C)  Hunt Commission legislation 
D)  Depository Institutions Deregulation and Monetary Control Act 
A)  Garn-St. Germain Depository Institutions Act 
B)  Glass-Steagall Act 
C)  Hunt Commission legislation 
D)  Depository Institutions Deregulation and Monetary Control Act

Question 15

The Bretton Woods Agreement was an agreement between major central banks to adopt capital adequacy requirements for internationally involved banks.

Accepted Answer

A) True 
 B)False

Question 16

Investment companies (mutual funds), investment banking firms, and brokerage firms are the primary types of ____________.

Accepted Answer

A)  banks 
B)  securities firms 
C)  pension funds 
D)  finance companies 
A)  banks 
B)  securities firms 
C)  pension funds 
D)  finance companies

Question 17

Which of the following are not thrift institutions?

Accepted Answer

A)  credit unions 
B)  savings and loan institutions 
C)  commercial banks 
D)  mutual savings banks 
A)  credit unions 
B)  savings and loan institutions 
C)  commercial banks 
D)  mutual savings banks

Question 18

The principal assets of savings banks are

Accepted Answer

A)  securities. 
B)  vault cash and deposits at other banks. 
C)  real estate mortgages. 
D)  deposits. 
A)  securities. 
B)  vault cash and deposits at other banks. 
C)  real estate mortgages. 
D)  deposits.

Question 19

The Second Bank of the United States was created to

Accepted Answer

A)  replace the First Bank of the United States. 
B)  appease political interests. 
C)  restore order to chaotic banking conditions. 
D)  sell gold to commercial banks. 
A)  replace the First Bank of the United States. 
B)  appease political interests. 
C)  restore order to chaotic banking conditions. 
D)  sell gold to commercial banks.

Question 20

__________________ is the process by which individual savings are accumulated in depository institutions and, in turn, lent or invested.

Accepted Answer

A)  Investing 
B)  Financial intermediation 
C)  The multiplier effect 
D)  Lending 
A)  Investing 
B)  Financial intermediation 
C)  The multiplier effect 
D)  Lending

_______________ provide loans directly to consumers and businesses and help borrowers obtain mortgage loans on real property.

Major types of securities firms include all of the following except

__________________ accept and invest individual savings and also facilitate the sale and transfer of securities between investors.

_ sell or market new securities issued by businesses to individual and institutional investors, whereas firms assist individuals who want to purchase new or existing securities issues or who want to sell previously purchased securities.

One of the most significant advantages claimed by branch banking is

Mortgage banking firms provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes.

Mutual funds are open-end investment companies that can issue an unlimited number of shares to its investors and use the pooled proceeds to purchase corporate and government securities.

The effective rate of interest is generally lower on a standard loan than an otherwise equivalent discount loan.

Savings and loan associations are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit.

The _______________________ provided for separation of commercial banking and investment banking activities in the United States.

Major types of depository institutions include all of the following except

The Glass-Steagall Act of 1933 provided for separation of commercial banking and investment banking activities in the United States.

The First Bank of the United States

The primary purpose of which Act was to aid the savings and loan industry?

The Bretton Woods Agreement was an agreement between major central banks to adopt capital adequacy requirements for internationally involved banks.

Investment companies (mutual funds), investment banking firms, and brokerage firms are the primary types of ____________.

Which of the following are not thrift institutions?

The principal assets of savings banks are

The Second Bank of the United States was created to

__________________ is the process by which individual savings are accumulated in depository institutions and, in turn, lent or invested.

The Financial Environment

Money and the Monetary System

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 3: Banks and Other Financial Institutions

_______________ provide loans directly to consumers and businesses and help borrowers obtain mortgage loans on real property.

Major types of securities firms include all of the following except

__________________ accept and invest individual savings and also facilitate the sale and transfer of securities between investors.

_______________ sell or market new securities issued by businesses to individual and institutional investors, whereas ______________ firms assist individuals who want to purchase new or existing securities issues or who want to sell previously purchased securities.

One of the most significant advantages claimed by branch banking is

Mortgage banking firms provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes.

Mutual funds are open-end investment companies that can issue an unlimited number of shares to its investors and use the pooled proceeds to purchase corporate and government securities.

The effective rate of interest is generally lower on a standard loan than an otherwise equivalent discount loan.

Savings and loan associations are cooperative nonprofit organizations that exist primarily to provide member depositors with consumer credit.

The _______________________ provided for separation of commercial banking and investment banking activities in the United States.

Major types of depository institutions include all of the following except

The Glass-Steagall Act of 1933 provided for separation of commercial banking and investment banking activities in the United States.

The First Bank of the United States

The primary purpose of which Act was to aid the savings and loan industry?

The Bretton Woods Agreement was an agreement between major central banks to adopt capital adequacy requirements for internationally involved banks.

Investment companies (mutual funds), investment banking firms, and brokerage firms are the primary types of ____________.

Which of the following are not thrift institutions?

The principal assets of savings banks are

The Second Bank of the United States was created to

__________________ is the process by which individual savings are accumulated in depository institutions and, in turn, lent or invested.

The Financial Environment

Money and the Monetary System

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

_ sell or market new securities issued by businesses to individual and institutional investors, whereas firms assist individuals who want to purchase new or existing securities issues or who want to sell previously purchased securities.