Question 1

Smart cards allow customers to:

Accepted Answer

A) spend money for various transactions, whereby the transaction value will be directly debited from the customer's account. 
B) store and spend money for various transactions using a card that has a chip-storage device. 
C) spend money for various transactions without having to pay the balance until a pre-set due date. 
D) access their funds overseas. 
A) spend money for various transactions, whereby the transaction value will be directly debited from the customer's account. 
B) store and spend money for various transactions using a card that has a chip-storage device. 
C) spend money for various transactions without having to pay the balance until a pre-set due date. 
D) access their funds overseas.

Question 2

Which of the following occurs if the costs of joint production of FI services are higher than they would be if they were produced independently?

Accepted Answer

A) economies of scale 
B) diseconomies of scale 
C) economies of scope 
D) diseconomies of scope 
A) economies of scale 
B) diseconomies of scale 
C) economies of scope 
D) diseconomies of scope

Question 3

Which of the following is consistent with economies of scope? The subscript 'b' refers to a banking firm, 's' for a securities firm, 'AC' is average costs and 'TC' is total costs.

Accepted Answer

A) ACb+s > ACb + ACs 
B) ACb+s = ACb + ACs 
C) ACb+s b + ACs 
D) TCb+s b + TCs 
A) ACb+s > ACb + ACs 
B) ACb+s = ACb + ACs 
C) ACb+s b + ACs 
D) TCb+s b + TCs

Question 4

ES Account stands for:

Accepted Answer

A) exchange settlement account. 
B) exchange systems account. 
C) European settlement account. 
D) emerging settlement account. 
A) exchange settlement account. 
B) exchange systems account. 
C) European settlement account. 
D) emerging settlement account.

Question 5

Which of the following statements is true?

Accepted Answer

A) Operational risk is not considered to be important in FIs and thus regulatory authorities assume that it is captured by an FI's general risk management framework. 
B) Operational risk is considered to be important and thus the Basel Committee requires FIs to provision against their operational risk exposures. 
C) Operational risk is considered to be important and thus the Basel Committee requires FIs to allocate capital against their operational risk exposures. 
D) Operational risk is considered to be important, however, regulators are aware that FIs have well-functioning operational risk defence mechanisms in place. 
A) Operational risk is not considered to be important in FIs and thus regulatory authorities assume that it is captured by an FI's general risk management framework. 
B) Operational risk is considered to be important and thus the Basel Committee requires FIs to provision against their operational risk exposures. 
C) Operational risk is considered to be important and thus the Basel Committee requires FIs to allocate capital against their operational risk exposures. 
D) Operational risk is considered to be important, however, regulators are aware that FIs have well-functioning operational risk defence mechanisms in place.

Question 6

Which of the following statements is false?

Accepted Answer

A) Regulations can affect the profitability of technological innovations. 
B) Regulations can hinder the rate and types of innovations. 
C) Typical regulations include caps on loan rates such as usury ceilings. 
D) Regulations are predominantly implemented to enhance FIs' profitability. 
A) Regulations can affect the profitability of technological innovations. 
B) Regulations can hinder the rate and types of innovations. 
C) Typical regulations include caps on loan rates such as usury ceilings. 
D) Regulations are predominantly implemented to enhance FIs' profitability.

Question 7

Losses on technological innovations and new technology could weaken an FI because scarce capital resources were invested in value-decreasing projects.

Accepted Answer

A) True 
 B)False

Smart cards allow customers to:

Which of the following occurs if the costs of joint production of FI services are higher than they would be if they were produced independently?

Which of the following is consistent with economies of scope? The subscript 'b' refers to a banking firm, 's' for a securities firm, 'AC' is average costs and 'TC' is total costs.

ES Account stands for:

Which of the following statements is true?

Which of the following statements is false?

Losses on technological innovations and new technology could weaken an FI because scarce capital resources were invested in value-decreasing projects.

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Capital Management and Adequacy

Filters

Exam 17: Technology and Other Operational Risk

Smart cards allow customers to:

Which of the following occurs if the costs of joint production of FI services are higher than they would be if they were produced independently?

Which of the following is consistent with economies of scope? The subscript 'b' refers to a banking firm, 's' for a securities firm, 'AC' is average costs and 'TC' is total costs.

ES Account stands for:

Which of the following statements is true?

Which of the following statements is false?

Losses on technological innovations and new technology could weaken an FI because scarce capital resources were invested in value-decreasing projects.

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Capital Management and Adequacy

Filters