Exam 3: The Organization and Structure of Banking and the Financial-Services Industry

Agency theory suggests that bank management will always pursue the goal of maximizing returns of the bank's shareholders.

In theory,if an interstate organization can acquire banks in states where bank earnings have a ______________ with bank earnings in those states where the interstate company is already represented,a "portfolio effect" may occur.

State-chartered banks in the United States represent about a quarter of all U.S.-chartered banks,while national banks account for approximately three quarters of all U.S.chartered banks.

A(n)________________________ is a corporation chartered for the specific purpose of holding the stock of one or more banks,often along with other businesses.

Over half of all U.S.states today limit branching activity.

Before offering any financial service to the public,a bank in the United States must have a:

Member banks are:

Community banks are usually smaller banks that are devoted principally to the markets for smaller,local deposits and loans.

___________________________ is the idea that as the output grows,cost of production per unit of goods and services will grow at a lower rate.

Less than 10 percent of the largest banks in the U.S.control almost 90 percent of the industry assets.

Many experts believe that lower agency costs and better company performance depend upon the effectiveness of ____________ the relationship that exists among managers,the board of directors,stockholders,and other stakeholders.

The majority of all U.S.banks are members of the Federal Reserve System.

A(n)__________________________ can invest in corporate stock as well as loan money to help finance the start of new ventures or support the expansion of existing businesses.

Under the Bank Holding Company Act,control of a bank is assumed to exist only if:

A unit branch faces the risk of variability in earnings if the surrounding economy weakens and people and businesses move away to other market areas.

Which of the following is a reason for the rapid growth in branch banks?

Which of the following is a type of nonbank businesses a bank holding company can own?

A money center bank is typically owned by:

Which of the following is one of the several advantages that bank holding company organizations have over other types of banking organizations?

A 'typical' community bank is committed to: