Question 1

A time deposit that is non-negotiable but allows a depositor to switch to a higher interest rate if market interest rates rise is called a:

Accepted Answer

A) negotiable CD. 
B) bump-up CD. 
C) step-up CD. 
D) liquid CD. 
E) None of the options is correct. 
A) negotiable CD. 
B) bump-up CD. 
C) step-up CD. 
D) liquid CD. 
E) None of the options is correct.

Question 2

An account at a bank that carries a fixed maturity date,with a fixed interest rate,and which often carries a penalty for early withdrawal of money is called a:

Accepted Answer

A) demand deposit. 
B) transaction deposit. 
C) time deposit. 
D) money market mutual deposit. 
E) None of the options is correct. 
A) demand deposit. 
B) transaction deposit. 
C) time deposit. 
D) money market mutual deposit. 
E) None of the options is correct.

Question 3

A bank expects to raise $20 million in new money if it pays a deposit rate of 7%,$60 million in new money if it pays a deposit rate of 7.5%,$100 million in new money if it pays a deposit rate of 8%,and $120 in new money if it pays a deposit rate of 8.5%.The bank expects to earn 9.5% on all money that it receives in new deposits.What is the marginal cost of deposits if the bank raises their deposit rate from 8 to 8.5%?

Accepted Answer

A) 11% 
B) 8.75% 
C) 7.75% 
D) 7% 
E) 0.5% 
A) 11% 
B) 8.75% 
C) 7.75% 
D) 7% 
E) 0.5%

Question 4

According to the textbook,the U.S.Treasury keeps most of its operating funds in TT&L deposits.

Accepted Answer

A) True 
 B)False

Question 5

A deposit which offers flexible money market interest rates but is accessible for spending by writing a limited number of checks or executing preauthorized drafts is known as a(n):

Accepted Answer

A) demand deposit. 
B) NOW account. 
C) MMDA. 
D) time deposit. 
E) None of the options is correct. 
A) demand deposit. 
B) NOW account. 
C) MMDA. 
D) time deposit. 
E) None of the options is correct.

Question 6

_________________________ is part of a new technology for processing checks where the bank takes a picture of the back and the front side of an original check and which can then be processed as if it were the original.

Accepted Answer

The answer of _________________________ is part of a new technology...

Question 7

Competition tends to raise deposit interest costs.

Accepted Answer

A) True 
 B)False

Question 8

The _________________________ is the added cost of bringing in new funds.

Accepted Answer

The answer of The _________________________ is the added cost of...

Question 9

There are still a number of existing problems with online bill-paying services which has limited its growth.

Accepted Answer

A) True 
 B)False

Question 10

Using deposit fee schedules that vary deposit prices according to the number of transactions,average balance in the deposit account,and maturity of the deposits represents which of the deposit pricing method listed below?

Accepted Answer

A) Marginal cost pricing 
B) Cost plus pricing 
C) Conditional pricing 
D) Upscale target pricing 
E) None of the options is correct. 
A) Marginal cost pricing 
B) Cost plus pricing 
C) Conditional pricing 
D) Upscale target pricing 
E) None of the options is correct.

Question 11

A customer makes a savings deposit for 45 days.During that time he earns $5 in interest and maintains an average daily balance of $1,000.What is the annual percentage yield on this savings account?

Accepted Answer

A) 0.5% 
B) 4.13% 
C) 4.07% 
D) 4.5% 
E) None of the options is correct 
A) 0.5% 
B) 4.13% 
C) 4.07% 
D) 4.5% 
E) None of the options is correct

Question 12

A bank quotes an APY of 8%.A small business that has an account with the bank had $2,500 in their account for half the year and $5,000 in their account for the other half of the year.How much in total interest earnings did the business make during the year?

Accepted Answer

A) $300 
B) $200 
C) $400 
D) $150 
E) None of the options is correct 
A) $300 
B) $200 
C) $400 
D) $150 
E) None of the options is correct

Question 13

A bank has $500 million in checking deposits with interest and non-interest costs of 6%,$250 million in savings and time deposits with interest and non-interest costs of 14%,and $250 million in equity capital with a cost of 25%.The bank has estimated that reserve requirements,deposit insurance fees and uncollected balances reduce the amount of money available on checking deposits by 15% and on savings and time deposits by 4%.What is the bank's before-tax cost of funds?

Accepted Answer

A) 15.00% 
B) 12.75% 
C) 13.29% 
D) 15.74% 
E) None of the options is correct 
A) 15.00% 
B) 12.75% 
C) 13.29% 
D) 15.74% 
E) None of the options is correct

Question 14

A(n)_________________________ is a conditional method of pricing deposit services in which the fees paid by the customer depend mainly on the account balance and volume of activity.

Accepted Answer

deposit fe

Question 15

Legally imposed interest-rate ceilings on deposits were first set in place in the United States after passage of the Bank Holding Company Act.

Accepted Answer

A) True 
 B)False

Question 16

The deposit pricing method that focuses on the added cost of bringing in new funds is called:

Accepted Answer

A) free pricing. 
B) conditionally free pricing. 
C) flat-rate pricing. 
D) marginal cost pricing. 
E) nonprice competition. 
A) free pricing. 
B) conditionally free pricing. 
C) flat-rate pricing. 
D) marginal cost pricing. 
E) nonprice competition.

Question 17

Interest payments on regular checking accounts were prohibited in the United States under terms of the:

Accepted Answer

A) Glass-Steagall Act. 
B) McFadden-Pepper Act. 
C) National Bank Act. 
D) Garn-St.Germain Depository Institutions Act. 
E) None of the options is correct. 
A) Glass-Steagall Act. 
B) McFadden-Pepper Act. 
C) National Bank Act. 
D) Garn-St.Germain Depository Institutions Act. 
E) None of the options is correct.

Question 18

Deposits designed to attract customers who wish to set aside money in anticipation of future expenditures or financial emergencies are called:

Accepted Answer

A) drafts. 
B) second-party payment accounts. 
C) thrift deposits. 
D) transaction accounts. 
E) None of the options is correct. 
A) drafts. 
B) second-party payment accounts. 
C) thrift deposits. 
D) transaction accounts. 
E) None of the options is correct.

Question 19

A bank expects to raise $30 million in new money if it pays a deposit rate of 7%.It can raise $60 million in new money if it pays a deposit rate of 7.5%.It can raise $80 million in new money if it pays a deposit rate of 8% and $100 million in new money if it pays a deposit rate of 8.5%.This bank expects to earn 9% on all money that it receives in new deposits.What is the marginal cost of deposits if this bank raises their deposit rate from 8% to 8.5%?

Accepted Answer

A) 0.5% 
B) 7.5% 
C) 8.0% 
D) 9.5% 
E) 10.5% 
A) 0.5% 
B) 7.5% 
C) 8.0% 
D) 9.5% 
E) 10.5%

Question 20

________________ are accounts in domestic banking institutions where the U.S.Treasury keeps most of their operating funds.

Accepted Answer

Treasury t

A time deposit that is non-negotiable but allows a depositor to switch to a higher interest rate if market interest rates rise is called a:

An account at a bank that carries a fixed maturity date,with a fixed interest rate,and which often carries a penalty for early withdrawal of money is called a:

According to the textbook,the U.S.Treasury keeps most of its operating funds in TT&L deposits.

A deposit which offers flexible money market interest rates but is accessible for spending by writing a limited number of checks or executing preauthorized drafts is known as a(n):

_________________________ is part of a new technology for processing checks where the bank takes a picture of the back and the front side of an original check and which can then be processed as if it were the original.

Competition tends to raise deposit interest costs.

The _________________________ is the added cost of bringing in new funds.

There are still a number of existing problems with online bill-paying services which has limited its growth.

Using deposit fee schedules that vary deposit prices according to the number of transactions,average balance in the deposit account,and maturity of the deposits represents which of the deposit pricing method listed below?

A customer makes a savings deposit for 45 days.During that time he earns $5 in interest and maintains an average daily balance of $1,000.What is the annual percentage yield on this savings account?

A bank quotes an APY of 8%.A small business that has an account with the bank had $2,500 in their account for half the year and $5,000 in their account for the other half of the year.How much in total interest earnings did the business make during the year?

A(n)_________________________ is a conditional method of pricing deposit services in which the fees paid by the customer depend mainly on the account balance and volume of activity.

Legally imposed interest-rate ceilings on deposits were first set in place in the United States after passage of the Bank Holding Company Act.

The deposit pricing method that focuses on the added cost of bringing in new funds is called:

Interest payments on regular checking accounts were prohibited in the United States under terms of the:

Deposits designed to attract customers who wish to set aside money in anticipation of future expenditures or financial emergencies are called:

________________ are accounts in domestic banking institutions where the U.S.Treasury keeps most of their operating funds.

An Overview of the Changing Financial-Services Sector

The Impact of Government Policy and Regulation on the Financial-Services Industry

The Organization and Structure of Banking and the Financial-Services Industry

Establishing New Banks, Branches, ATMs, Telephone Services, and Websites

The Financial Statements of Banks and Their Principal Competitors

Measuring and Evaluating the Performance of Banks and Their Principal Competitors

Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques

Investment Banking,Insurance,and Other Sources of Fee Income

Risk Management: Asset-Backed Securities, Loan Sales, Credit Standbys, and Credit Derivatives

The Investment Function in Financial-Services Management

Liquidity and Reserves Management: Strategies and Policies

Managing Nondeposit Liabilities

Investment Banking, insurance, and Other Sources of Fee Income

The Management of Capital

Lending Policies and Procedures: Managing Credit Risk

Lending to Business Firms and Pricing Business Loans

Consumer Loans, Credit Cards, and Real Estate Lending

Acquisitions and Mergers in Financial-Services Management

International Banking and the Future of Banking and Financial Services

Filters

Exam 12: Managing and Pricing Deposit Services

A time deposit that is non-negotiable but allows a depositor to switch to a higher interest rate if market interest rates rise is called a:

An account at a bank that carries a fixed maturity date,with a fixed interest rate,and which often carries a penalty for early withdrawal of money is called a:

According to the textbook,the U.S.Treasury keeps most of its operating funds in TT&L deposits.

A deposit which offers flexible money market interest rates but is accessible for spending by writing a limited number of checks or executing preauthorized drafts is known as a(n):

_________________________ is part of a new technology for processing checks where the bank takes a picture of the back and the front side of an original check and which can then be processed as if it were the original.

Competition tends to raise deposit interest costs.

The _________________________ is the added cost of bringing in new funds.

There are still a number of existing problems with online bill-paying services which has limited its growth.

Using deposit fee schedules that vary deposit prices according to the number of transactions,average balance in the deposit account,and maturity of the deposits represents which of the deposit pricing method listed below?

A customer makes a savings deposit for 45 days.During that time he earns $5 in interest and maintains an average daily balance of $1,000.What is the annual percentage yield on this savings account?

A bank quotes an APY of 8%.A small business that has an account with the bank had $2,500 in their account for half the year and $5,000 in their account for the other half of the year.How much in total interest earnings did the business make during the year?

A(n)_________________________ is a conditional method of pricing deposit services in which the fees paid by the customer depend mainly on the account balance and volume of activity.

Legally imposed interest-rate ceilings on deposits were first set in place in the United States after passage of the Bank Holding Company Act.

The deposit pricing method that focuses on the added cost of bringing in new funds is called:

Interest payments on regular checking accounts were prohibited in the United States under terms of the:

Deposits designed to attract customers who wish to set aside money in anticipation of future expenditures or financial emergencies are called:

________________ are accounts in domestic banking institutions where the U.S.Treasury keeps most of their operating funds.

An Overview of the Changing Financial-Services Sector

The Impact of Government Policy and Regulation on the Financial-Services Industry

The Organization and Structure of Banking and the Financial-Services Industry

Establishing New Banks, Branches, ATMs, Telephone Services, and Websites

The Financial Statements of Banks and Their Principal Competitors

Measuring and Evaluating the Performance of Banks and Their Principal Competitors

Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques

Investment Banking,Insurance,and Other Sources of Fee Income

Risk Management: Asset-Backed Securities, Loan Sales, Credit Standbys, and Credit Derivatives

The Investment Function in Financial-Services Management

Liquidity and Reserves Management: Strategies and Policies

Managing Nondeposit Liabilities

Investment Banking, insurance, and Other Sources of Fee Income

The Management of Capital

Lending Policies and Procedures: Managing Credit Risk

Lending to Business Firms and Pricing Business Loans

Consumer Loans, Credit Cards, and Real Estate Lending

Acquisitions and Mergers in Financial-Services Management

International Banking and the Future of Banking and Financial Services

Filters