Exam 1: Functions and Forms of Banking

Which of the following is NOT a reason for the increased competition Between financial institutions?

Since banks rely upon the trust of their customers many banks are ofte referred to as "trust" banks.

The approximate number of banks in the United States is:

Profitability ___________ in the banking industry, while the number of bank failures________________ in the 1990s.

Which of the following is NOT a function of commercial banks?

Banks can be uniquely defined in terms of offering transactio accounts and making commercial loans.

The largest type of bank assets is in the form of securities

The decline in market share for commercial banks is the result of:

In the past 20 years, the range of financial service has:

Which of the following is not a function generally provided by commercial banks?

A wholesale bank is one that both draws funds from businesses an makes loans primarily to businesses.

Off-balance sheet risk taking involves:

Low levels of interest rates in the late 1990s forced banks to increase profitably by:

Which of the following is NOT a legal constraint placed on commercial Banks?

Most regulatory constraints on bank behavior are designed either to reduce the risk of failure or to affect the price and allocation of bank credit.

The standby letter of credit is one of the best known of the various off-balance sheet activities of commercial banks.

Which of the following is NOT included in the total risk of a commercial Bank?

Bank managers today operate in an environment of ______risk and Face a more ________________ financial world than in the past.

The effects of despecialization of financial services have been more evident at nonbank firms than at commercial banks.

The largest source of banks funds is the demand deposit accounts of individuals, businesses, and governments