Question 1

Web-centered banks with little or no physical facilities are known as virtual banks.

Accepted Answer

A) True 
 B)False

Question 2

A time deposit that has a denomination greater than $100,000 and is generally for wealthy individuals and corporations is known as 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 3

The Truth in Savings Act requires a bank to disclose to its deposit customers,the frequency with which interest is compounded on all interest-bearing accounts.

Accepted Answer

A) True 
 B)False

Question 4

Returns on certificates of deposits linked to performance of stock markets are known as:

Accepted Answer

A) equity CDs. 
B) stock CDs. 
C) market CDs. 
D) index CDs. 
E) exchange CDs. 
A) equity CDs. 
B) stock CDs. 
C) market CDs. 
D) index CDs. 
E) exchange CDs.

Question 5

A time deposit that allows for a periodic upward adjustment to the promised rate 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 6

For decades,depository institutions offered only one type of savings plan-____________.One that could be opened with as little as $5 and withdrawal privileges were unlimited.

Accepted Answer

passbook s

Question 7

The degree of risk exposure,based on which the amount of insurance premiums paid by each FDIC-insured depository is determined,is an interplay of two factors-risk class to which the institution belongs to and:

Accepted Answer

A) capital adequacy 
B) net non-performing assets 
C) gross non-performing assets 
D) percentage of total liabilities hedged 
E) open swap exposures 
A) capital adequacy 
B) net non-performing assets 
C) gross non-performing assets 
D) percentage of total liabilities hedged 
E) open swap exposures

Question 8

A Roth IRA allows an individual to accumulate investment earnings tax free and also pay no tax on their investment earnings when withdrawn provided the taxpayer follows the rules on this new account.

Accepted Answer

A) True 
 B)False

Question 9

__________ are often the most profitable deposit services for a bank.

Accepted Answer

A) Time deposits 
B) Transaction deposits 
C) Thrift deposits 
D) Passbook savings deposits 
E) Certificates of deposits 
A) Time deposits 
B) Transaction deposits 
C) Thrift deposits 
D) Passbook savings deposits 
E) Certificates of deposits

Question 10

A(n)_________________________ requires a bank to honor withdrawals immediately upon request.

Accepted Answer

The answer of A(n)_________________________ requires a bank to honor withdrawals...

Question 11

_________________________ are a stable base of deposited funds that are not highly sensitive to movements in market interest rates and tend to remain with the depository institution.

Accepted Answer

The answer of _________________________ are a stable base of deposited...

Question 12

A bank expects to raise $30 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%,$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%.The bank expects to earn 9% on all money that it receives in new deposits.What deposit rate should the bank offer on its deposits,if it uses the marginal cost method of determining deposit rates?

Accepted Answer

A) 7% 
B) 7.5% 
C) 8% 
D) 8.5% 
E) None of the options is correct 
A) 7% 
B) 7.5% 
C) 8% 
D) 8.5% 
E) None of the options is correct

Question 13

In determining the balance on which interest earnings are figured,a depository institution must use the ___________________ in the deposit.

Accepted Answer

A) minimum balance amount 
B) maximum balance amount 
C) full amount of the principal 
D) average monthly balance 
E) average daily balance 
A) minimum balance amount 
B) maximum balance amount 
C) full amount of the principal 
D) average monthly balance 
E) average daily balance

Question 14

Under the Truth in Savings Act,a bank must inform its customers of the terms being quoted on their deposits.Which of the following is not one of the terms listed?

Accepted Answer

A) Interest rate information 
B) Balance computation method 
C) Early withdrawal penalty 
D) Transaction limitations 
E) Minimum balance requirements 
A) Interest rate information 
B) Balance computation method 
C) Early withdrawal penalty 
D) Transaction limitations 
E) Minimum balance requirements

Question 15

A bank expects to raise $30 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%,$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%.The bank expects to earn 9% on all money that it receives in new deposits.What is the marginal cost of deposits if the bank raises its deposit rate from 7 to 7.5%?

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 16

A(n)_________________________ is a retirement plan that is designed for self-employed individuals.

Accepted Answer

The answer of A(n)_________________________ is a retirement plan that is...

Question 17

The contention that there are certain banking services (such as small loans or savings and checking accounts)that every citizen should have access to is usually called socialized banking.

Accepted Answer

A) True 
 B)False

Question 18

According to recent studies cited in this chapter,in choosing a bank to hold their savings deposits,which of the following factors do household customers rank first?

Accepted Answer

A) Familiarity 
B) Interest rate paid 
C) Transactional convenience 
D) Location 
E) Fees charged 
A) Familiarity 
B) Interest rate paid 
C) Transactional convenience 
D) Location 
E) Fees charged

Question 19

A bank expects to raise $30 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%,$80 million in new money if it pays a deposit rate of 8%,and it can raise $100 million in new money if it pays a deposit rate of 8.5%.The 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 its deposit rate from 7.5% to 8%?

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

Deposits held by banks with others are called correspondent deposits.

Accepted Answer

A) True 
 B)False

Web-centered banks with little or no physical facilities are known as virtual banks.

A time deposit that has a denomination greater than $100,000 and is generally for wealthy individuals and corporations is known as a:

The Truth in Savings Act requires a bank to disclose to its deposit customers,the frequency with which interest is compounded on all interest-bearing accounts.

Returns on certificates of deposits linked to performance of stock markets are known as:

A time deposit that allows for a periodic upward adjustment to the promised rate is called a:

For decades,depository institutions offered only one type of savings plan-____________.One that could be opened with as little as $5 and withdrawal privileges were unlimited.

The degree of risk exposure,based on which the amount of insurance premiums paid by each FDIC-insured depository is determined,is an interplay of two factors-risk class to which the institution belongs to and:

A Roth IRA allows an individual to accumulate investment earnings tax free and also pay no tax on their investment earnings when withdrawn provided the taxpayer follows the rules on this new account.

__________ are often the most profitable deposit services for a bank.

A(n)_________________________ requires a bank to honor withdrawals immediately upon request.

_________________________ are a stable base of deposited funds that are not highly sensitive to movements in market interest rates and tend to remain with the depository institution.

In determining the balance on which interest earnings are figured,a depository institution must use the ___________________ in the deposit.

Under the Truth in Savings Act,a bank must inform its customers of the terms being quoted on their deposits.Which of the following is not one of the terms listed?

A(n)_________________________ is a retirement plan that is designed for self-employed individuals.

The contention that there are certain banking services (such as small loans or savings and checking accounts)that every citizen should have access to is usually called socialized banking.

According to recent studies cited in this chapter,in choosing a bank to hold their savings deposits,which of the following factors do household customers rank first?

Deposits held by banks with others are called correspondent deposits.

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

Web-centered banks with little or no physical facilities are known as virtual banks.

A time deposit that has a denomination greater than $100,000 and is generally for wealthy individuals and corporations is known as a:

The Truth in Savings Act requires a bank to disclose to its deposit customers,the frequency with which interest is compounded on all interest-bearing accounts.

Returns on certificates of deposits linked to performance of stock markets are known as:

A time deposit that allows for a periodic upward adjustment to the promised rate is called a:

For decades,depository institutions offered only one type of savings plan-____________.One that could be opened with as little as $5 and withdrawal privileges were unlimited.

The degree of risk exposure,based on which the amount of insurance premiums paid by each FDIC-insured depository is determined,is an interplay of two factors-risk class to which the institution belongs to and:

A Roth IRA allows an individual to accumulate investment earnings tax free and also pay no tax on their investment earnings when withdrawn provided the taxpayer follows the rules on this new account.

__________ are often the most profitable deposit services for a bank.

A(n)_________________________ requires a bank to honor withdrawals immediately upon request.

_________________________ are a stable base of deposited funds that are not highly sensitive to movements in market interest rates and tend to remain with the depository institution.

In determining the balance on which interest earnings are figured,a depository institution must use the ___________________ in the deposit.

Under the Truth in Savings Act,a bank must inform its customers of the terms being quoted on their deposits.Which of the following is not one of the terms listed?

A(n)_________________________ is a retirement plan that is designed for self-employed individuals.

The contention that there are certain banking services (such as small loans or savings and checking accounts)that every citizen should have access to is usually called socialized banking.

According to recent studies cited in this chapter,in choosing a bank to hold their savings deposits,which of the following factors do household customers rank first?

Deposits held by banks with others are called correspondent deposits.

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