The following three FIs dominate a local market and their total assets are given below. $\begin{array}{lccc} \text {Institution }& \text { Asset Size}\\ \text {Bank A}&\$ 50 \text { million}\\ \text {Bank B}& \$ 60 \text { million}\\ \text {Bank C}&\$ 90 \text { million}\\ \end{array}$ If Bank C splits into two separate institutions at ½ its original size each,what is the new Herfindahl-Hirschman Index (HHI)?

A) 60. B) 340. C) 2,538. D) 2,847. A) 60. B) 340. C) 2,538. D) 2,847.

If Bank 1 is acquired by Bank 3,what is the impact on the market's HHI? $\begin{array}{lccc} \text {Bank }& \text { Asset Size}\\ 1&\$ 100 \text { million}\\ 2& \$ 200 \text { million}\\ 3&\$ 500 \text { million}\\ \end{array}$

A) An increase in the HHI of 1600. B) An increase in the HHI of 624. C) An increase in the HHI of 1563. D) A decrease in the HHI of 222. A) An increase in the HHI of 1600. B) An increase in the HHI of 624. C) An increase in the HHI of 1563. D) A decrease in the HHI of 222.

The following three FIs dominate a local market and their total assets are given below. $\begin{array}{lccc} \text {Institution }& \text { Asset Size}\\ \text {Bank A}&\$ 50 \text { million}\\ \text {Bank B}& \$ 60 \text { million}\\ \text {Bank C}&\$ 90 \text { million}\\ \end{array}$ Under the 1982 guidelines,would the Fed approve the merger of Banks A and C?

A) It is likely to approve because it is not a concentrated market. B) It is unlikely to approve because the post-merger HHI has increased by over 100. C) It is likely to approve because the post-merger HHI has increased by over 100. D) Likely to approve because the post-merger HHI has increased by less than 5,000. A) It is likely to approve because it is not a concentrated market. B) It is unlikely to approve because the post-merger HHI has increased by over 100. C) It is likely to approve because the post-merger HHI has increased by over 100. D) Likely to approve because the post-merger HHI has increased by less than 5,000.

The following three FIs dominate a local market and their total assets are given below. $\begin{array}{lccc} \text {Institution }& \text { Asset Size}\\ \text {Bank A}&\$ 50 \text { million}\\ \text {Bank B}& \$ 60 \text { million}\\ \text {Bank C}&\$ 90 \text { million}\\ \end{array}$ If Bank A acquires Bank B,what is the new Herfindahl-Hirschman Index (HHI)?

A) 60. B) 100. C) 5,800. D) 5,050. A) 60. B) 100. C) 5,800. D) 5,050.

A) internally imposed barriers that limits the flow of confidential client information among departments or areas. B) regulatory barriers that are introduced to insulate the bank against losses. C) regulations that prohibit a bank from lending anything at all to its securities affiliates. D) restrictions on a bank holding company that prevents the use of subsidiary funds to support ailing affiliates. A) internally imposed barriers that limits the flow of confidential client information among departments or areas. B) regulatory barriers that are introduced to insulate the bank against losses. C) regulations that prohibit a bank from lending anything at all to its securities affiliates. D) restrictions on a bank holding company that prevents the use of subsidiary funds to support ailing affiliates.

Exam 21: Product and Geographic Expansion

The following three FIs dominate a local market and their total assets are given below. Institution Asset Size Bank A \ 50 million Bank B \ 60 million Bank C \ 90 million If Bank C splits into two separate institutions at ½ its original size each,what is the new Herfindahl-Hirschman Index (HHI)?

(Multiple Choice)

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Question 41

Research on bank mergers for the decade of the 1990s found that improved performance of the merged bank occurred because of both revenue enhancements and cost reduction.

(True/False)

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Question 42

Offices of foreign banks may be examined by the Federal Reserve under the FBSEA of 1991.

(True/False)

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Question 43

The USA Patriot Act of 2001 prohibits U.S.banks from providing banking services to foreign banks.

(True/False)

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Question 44

Chinese walls are barriers within organizations that limit the flow of confidential information between departments of business areas.

(True/False)

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Question 45

If Bank 1 is acquired by Bank 3,what is the impact on the market's HHI? Bank Asset Size 1 \ 100 million 2 \ 200 million 3 \ 500 million

(Multiple Choice)

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Question 46

The following three FIs dominate a local market and their total assets are given below. Institution Asset Size Bank A \ 50 million Bank B \ 60 million Bank C \ 90 million Under the 1982 guidelines,would the Fed approve the merger of Banks A and C?

(Multiple Choice)

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Question 47

Which of the following is a disadvantage of international expansion?

(Multiple Choice)

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Question 48

A level _____ of the Herfindahl-Hirschman Index (HHI)is considered to reflect a highly concentrated market.

(Multiple Choice)

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Question 49

The effect of the International Banking Act of 1978 was to accelerate the expansion of foreign bank activities in the U.S.primarily because of their access to the Federal Reserve's discount window,Fedwire,and FDIC insurance.

(True/False)

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Question 50

The banking industry in the U.S.has faced increased competition

(Multiple Choice)

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Question 51

Banks increasingly have been susceptible to nonbank competition on both sides of the balance sheet.

(True/False)

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Question 52

This legislation explicitly stated that banking and insurance were not closely related activities.

(Multiple Choice)

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Question 53

The first state in the U.S.to allow out of state acquisitions was

(Multiple Choice)

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Question 54

The following three FIs dominate a local market and their total assets are given below. Institution Asset Size Bank A \ 50 million Bank B \ 60 million Bank C \ 90 million If Bank A acquires Bank B,what is the new Herfindahl-Hirschman Index (HHI)?

(Multiple Choice)

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Question 55

Identify the legislation that restricted the branching of nationally-chartered banks to the same guidelines as allowed to state-chartered banks.

(Multiple Choice)

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Question 56

Chinese Walls are

(Multiple Choice)

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Question 57

The required monitoring and surveillance efforts of several regulatory bodies in the case of large holding companies with multi-subsidiaries may actually decrease the efficiency of regulatory oversight.

(True/False)

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Question 58

Which of the following describes a firm commitment underwriting?

(Multiple Choice)

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Question 59

Research suggests that the total risk exposure of a financial services organization could actually increase if there is excessive product expansion in some nonbank lines.

(True/False)

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Question 60

Showing 41 - 60 of 156

Exam 21: Product and Geographic Expansion

The following three FIs dominate a local market and their total assets are given below. Institution Asset Size Bank A \ 50 million Bank B \ 60 million Bank C \ 90 million If Bank C splits into two separate institutions at ½ its original size each,what is the new Herfindahl-Hirschman Index (HHI)?

Research on bank mergers for the decade of the 1990s found that improved performance of the merged bank occurred because of both revenue enhancements and cost reduction.

Offices of foreign banks may be examined by the Federal Reserve under the FBSEA of 1991.

The USA Patriot Act of 2001 prohibits U.S.banks from providing banking services to foreign banks.

Chinese walls are barriers within organizations that limit the flow of confidential information between departments of business areas.

If Bank 1 is acquired by Bank 3,what is the impact on the market's HHI? Bank Asset Size 1 \ 100 million 2 \ 200 million 3 \ 500 million

The following three FIs dominate a local market and their total assets are given below. Institution Asset Size Bank A \ 50 million Bank B \ 60 million Bank C \ 90 million Under the 1982 guidelines,would the Fed approve the merger of Banks A and C?

Which of the following is a disadvantage of international expansion?

A level _____ of the Herfindahl-Hirschman Index (HHI)is considered to reflect a highly concentrated market.

The effect of the International Banking Act of 1978 was to accelerate the expansion of foreign bank activities in the U.S.primarily because of their access to the Federal Reserve's discount window,Fedwire,and FDIC insurance.

The banking industry in the U.S.has faced increased competition

Banks increasingly have been susceptible to nonbank competition on both sides of the balance sheet.

This legislation explicitly stated that banking and insurance were not closely related activities.

The first state in the U.S.to allow out of state acquisitions was

The following three FIs dominate a local market and their total assets are given below. Institution Asset Size Bank A \ 50 million Bank B \ 60 million Bank C \ 90 million If Bank A acquires Bank B,what is the new Herfindahl-Hirschman Index (HHI)?

Identify the legislation that restricted the branching of nationally-chartered banks to the same guidelines as allowed to state-chartered banks.

Chinese Walls are

The required monitoring and surveillance efforts of several regulatory bodies in the case of large holding companies with multi-subsidiaries may actually decrease the efficiency of regulatory oversight.

Which of the following describes a firm commitment underwriting?

Research suggests that the total risk exposure of a financial services organization could actually increase if there is excessive product expansion in some nonbank lines.

Why Are Financial Institutions Special

Financial Services: Depository Institutions

Financial Services: Finance Companies

Financial Services: Securities Firms and Investment Banks

Financial Services: Mutual Fund and Hedge Fund Companies

Financial Services: Insurance Companies

Risks of Financial Institutions

Interest Rate Risk I

Interest Rate Risk II

Credit Risk: Individual Loan Risk

Credit Risk: Loan Portfolio and Concentration Risk

Liquidity Risk

Foreign Exchange Risk

Sovereign Risk

Market Risk

Off-Balance-Sheet Risk

Technology and Other Operational Risks

Liability and Liquidity Management

Deposit Insurance and Other Liability Guarantees

Capital Adequacy

Futures and Forwards

Options, Caps, Floors, and Collars

Swaps

Loan Sales

Securitization

Filters