Question 1

Equity capital is bank's major source of funds.

Accepted Answer

A) True 
 B)False

Question 2

Commercial banks have experienced a substantial increase in thei market share.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following accurately describes the process of securitization?

Accepted Answer

A)  the process of substituting securities for deposits in bank balance sheets 
B)  the process of making some or all of the loan portfolios marketable by establishing pools of loan interest (securities) in the pool 
C)  the process of buying securities 
D)  none of the above 
A)  the process of substituting securities for deposits in bank balance sheets 
B)  the process of making some or all of the loan portfolios marketable by establishing pools of loan interest (securities) in the pool 
C)  the process of buying securities 
D)  none of the above

Question 4

Commercial banks offer fiduciary services in order to:

Accepted Answer

A)  increase the amount of assets on their balance sheet without adding risk 
B)  comply with federal regulations 
C)  service employee pension and profit sharing programs 
D)  maximize interest income 
A)  increase the amount of assets on their balance sheet without adding risk 
B)  comply with federal regulations 
C)  service employee pension and profit sharing programs 
D)  maximize interest income

Question 5

Which of the following is not a component of total risk for a bank?

Accepted Answer

A)  credit risk 
B)  capital risk 
C)  systematic risk 
D)  interest rate risk 
A)  credit risk 
B)  capital risk 
C)  systematic risk 
D)  interest rate risk

Question 6

Risk management is an important though peripheral activity for mos commercial banks.

Accepted Answer

A) True 
 B)False

Question 7

The payments role of commercial banks include both offering transactio accounts and being ready to make wire transfers.

Accepted Answer

A) True 
 B)False

Question 8

The constraints on commercial banks:

Accepted Answer

A)  are the result of the banking collapse of the 1930's 
B)  affect the price and allocation of bank credit 
C)  are designed to reduce risk of failure 
D)  all of the above 
A)  are the result of the banking collapse of the 1930's 
B)  affect the price and allocation of bank credit 
C)  are designed to reduce risk of failure 
D)  all of the above

Question 9

Which of the following is prohibited for commercial banks?

Accepted Answer

A)  real estate investment 
B)  insurance underwriting 
C)  corporate bond underwriting 
D)  all of the above 
A)  real estate investment 
B)  insurance underwriting 
C)  corporate bond underwriting 
D)  all of the above

Question 10

Globalization of the financial system involves:

Accepted Answer

A)  the expanding number of services offered by banks 
B)  the increasing links between U. S. and foreign markets 
C)  the increasing competition in the U. S. among domestic banks 
D)  b, c 
A)  the expanding number of services offered by banks 
B)  the increasing links between U. S. and foreign markets 
C)  the increasing competition in the U. S. among domestic banks 
D)  b, c

Question 11

Which of the following is an example of fraud risk?

Accepted Answer

A)  a bank officer falsifying records 
B)  a customer writes several bad checks and leaves town 
C)  a depositor fails to report a clerical error in his favor 
D)  all of the above 
A)  a bank officer falsifying records 
B)  a customer writes several bad checks and leaves town 
C)  a depositor fails to report a clerical error in his favor 
D)  all of the above

Question 12

The two largest categories of bank loans are:

Accepted Answer

A)  business and real estate loans 
B)  consumer loans and real estate loans 
C)  loans to purchase securities and business loans 
D)  business and consumer loans 
A)  business and real estate loans 
B)  consumer loans and real estate loans 
C)  loans to purchase securities and business loans 
D)  business and consumer loans

Question 13

The social constraints imposed on banks are:

Accepted Answer

A)  exemplified by the Community Reinvestment Act 
B)  due to the historical position of the bank as the core of the financial system 
C)  regulated by the federal reserve bank 
D)  regulated by the FDIC 
A)  exemplified by the Community Reinvestment Act 
B)  due to the historical position of the bank as the core of the financial system 
C)  regulated by the federal reserve bank 
D)  regulated by the FDIC

Question 14

Commercial banks do not engage in which of the following securities related services?

Accepted Answer

A)  discount brokerage services 
B)  underwriting corporate stocks and bonds 
C)  underwriting U. S. Treasury securities 
D)  facilitating mergers and acquisitions 
A)  discount brokerage services 
B)  underwriting corporate stocks and bonds 
C)  underwriting U. S. Treasury securities 
D)  facilitating mergers and acquisitions

Question 15

Which of the following is most important to commercial bank management?

Accepted Answer

A)  increasing the bank's total size 
B)  maintaining a minimum amount of risk 
C)  profits from financial services (adjusted for risk) 
D)  out-performing other depository institutions 
A)  increasing the bank's total size 
B)  maintaining a minimum amount of risk 
C)  profits from financial services (adjusted for risk) 
D)  out-performing other depository institutions

Question 16

Securitization refers to the process of making some of the loa portfolio marketable by establishing pools of loans and selling interest (i.e., securities) in the pool.

Accepted Answer

A) True 
 B)False

Question 17

The Glass-Steagall Act authorized banks to engage in securitie activities.

Accepted Answer

A) True 
 B)False

Question 18

Economies of scale are evident in:

Accepted Answer

A)  credit card lending 
B)  farm lending 
C)  wholesale banking 
D)  universal banking 
A)  credit card lending 
B)  farm lending 
C)  wholesale banking 
D)  universal banking

Question 19

Commercial bank assets exceed 50 percent of all financial secto assets.

Accepted Answer

A) True 
 B)False

Question 20

The largest use of funds for a commercial bank is:

Accepted Answer

A)  savings deposits 
B)  loans 
C)  time deposits 
D)  securities 
A)  savings deposits 
B)  loans 
C)  time deposits 
D)  securities

Equity capital is bank's major source of funds.

Commercial banks have experienced a substantial increase in thei market share.

Which of the following accurately describes the process of securitization?

Commercial banks offer fiduciary services in order to:

Which of the following is not a component of total risk for a bank?

Risk management is an important though peripheral activity for mos commercial banks.

The payments role of commercial banks include both offering transactio accounts and being ready to make wire transfers.

The constraints on commercial banks:

Which of the following is prohibited for commercial banks?

Globalization of the financial system involves:

Which of the following is an example of fraud risk?

The two largest categories of bank loans are:

The social constraints imposed on banks are:

Commercial banks do not engage in which of the following securities related services?

Which of the following is most important to commercial bank management?

Securitization refers to the process of making some of the loa portfolio marketable by establishing pools of loans and selling interest (i.e., securities) in the pool.

The Glass-Steagall Act authorized banks to engage in securitie activities.

Economies of scale are evident in:

Commercial bank assets exceed 50 percent of all financial secto assets.

The largest use of funds for a commercial bank is:

The Bank Regulatory Environment

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Commercial and Industrial Lending

Real Estate and Consumer Lending

Liquidity Management

Capital Management

Managing Liabilities

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Global Financial Services

Filters

Exam 1: Functions and Forms of Banking

Equity capital is bank's major source of funds.

Commercial banks have experienced a substantial increase in thei market share.

Which of the following accurately describes the process of securitization?

Commercial banks offer fiduciary services in order to:

Which of the following is not a component of total risk for a bank?

Risk management is an important though peripheral activity for mos commercial banks.

The payments role of commercial banks include both offering transactio accounts and being ready to make wire transfers.

The constraints on commercial banks:

Which of the following is prohibited for commercial banks?

Globalization of the financial system involves:

Which of the following is an example of fraud risk?

The two largest categories of bank loans are:

The social constraints imposed on banks are:

Commercial banks do not engage in which of the following securities related services?

Which of the following is most important to commercial bank management?

Securitization refers to the process of making some of the loa portfolio marketable by establishing pools of loans and selling interest (i.e., securities) in the pool.

The Glass-Steagall Act authorized banks to engage in securitie activities.

Economies of scale are evident in:

Commercial bank assets exceed 50 percent of all financial secto assets.

The largest use of funds for a commercial bank is:

The Bank Regulatory Environment

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Commercial and Industrial Lending

Real Estate and Consumer Lending

Liquidity Management

Capital Management

Managing Liabilities

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Global Financial Services

Filters