Question 1

Which of the following set minimum capital requirement for the savings and loans?

Accepted Answer

A) the Basel Accord 
B) the Federal Reserve 
C) the Securities and Exchange Commission 
D) the Financial Institutions Reform Recovery, and Enforcement Act of 1989 (FIRRE
A)

Question 2

With regard to consumer protection, finance companies are regulated by which of the following?

Accepted Answer

A) the FDIC 
B) the Fed 
C) the Office of the Comptroller of the Currency 
D) the Federal Trade Commission

Question 3

Which of the following acts repealed the separation between commercial and investment banking?

Accepted Answer

A) the Glass-Steagall Act 
B) the Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  
C) the Gramm-Leach-Bliley Act (GLB
A)  
D) the Garn-St. Germain Act

Question 4

Which of the following did the Federal Deposit Insurance Corporation Improvement Act (FDICIA) not do?

Accepted Answer

A) computed insurance premiums based on the risk exposure of the depository institution 
B) limited insurance coverage in regular accounts to a maximum of $100,000 
C) set limits on the capability of foreign banks in the United States to use certain categories of deposits 
D) required the FDIC to use the swiftest method possible to resolve any insolvency even if the method was more expensive in the long run

Question 5

The practice of drawing a line around a certain area on a map and restricting the number or dollar amount of loans made in that area without regard to the credit worthiness of the borrower is called

Accepted Answer

A) redlining. 
B) blackballing. 
C) insider trading. 
D) greenfielding.

Question 6

__________ removed many of the regulations established during the Great Depression. It phased out Regulation Q interest rate ceilings, established uniform and universal reserve requirements, increased the assets and liabilities that depository institutions could hold, authorized NOW accounts, and suspended usury ceilings.

Accepted Answer

A) the Glass-Steagall Act of 1933 
B) the Garn-St. Germain Depository Institutions Act of 1982. 
C) the Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  of 1989 
D) the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMC
A) .

Question 7

The Gramm-Leach-Bliley Act (GLBA) authorized

Accepted Answer

A) bank holding companies to become financial holding companies. 
B) financial holding companies to engage in merchant banking. 
C) financial holding companies to merge with insurance companies and securities firms. 
D) All of the above are correct.

Question 8

Which statute initiated international capital standards based on risk-adjusted and total assets?

Accepted Answer

A) the Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  
B) the Basel Accord 
C) the Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  
D) the Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)

Question 9

The Investment Company Act of 1940 gave the Securities and Exchange Commission (SEC) regulatory control over which of the following?

Accepted Answer

A) financial options 
B) insurance companies 
C) mutual funds 
D) financial futures

Question 10

Trading by those who have access to information on new securities before they are made public is called which of the following?

Accepted Answer

A) fast-track trading 
B) new secure trading 
C) insider trading 
D) fraudulent trading

Question 11

The Depository Institutions Deregulatory and Monetary Control Act of 1980 (DIDMCA)

Accepted Answer

A) expanded the asset and liability powers for banks and thrifts. 
B) removed many of the regulations that had been put in place during the Great Depression. 
C) set uniform and universal reserve requirements for all depositories and suspended usury ceilings. 
D) All of the above are correct

Question 12

The Garn-St. Germain Act of 1982

Accepted Answer

A) authorized money market deposit accounts and Super NOW accounts. 
B) imposed universal and uniform reserve requirements. 
C) slowed down the rate at which Regulation Q interest rate ceilings were removed. 
D) All of the above are correct.

Question 13

Which act was chiefly responsible for bailing out the S&L industry?

Accepted Answer

A) The Basel Accord of 1988 
B) The Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  of 1989 
C) The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991 
D) The Interstate Banking and Branching Efficiency Act (IBBE
A)  of 1994

Question 14

The Securities and Exchange Commission (SEC) regulates

Accepted Answer

A) financial options. 
B) mutual funds. 
C) securities markets, including brokers and dealers. 
D) All of the above are correct.

Question 15

Which of the following was not a main provision of Depository Institutions Deregulation and Monetary Control Act (DIDMCA)?

Accepted Answer

A) phased out Regulation Q interest rate ceilings over a six-year period 
B) authorized money market deposit accounts 
C) expanded the asset and liability powers of banks and thrifts 
D) allowed all depository institutions to offer NOW accounts

Question 16

Mutual funds are regulated by the

Accepted Answer

A) Fed. 
B) FDIC. 
C) Securities and Exchange Commission (SE
C) . 
D) Federal Trade Commission.

Question 17

Which of the following are not regulated at the federal level?

Accepted Answer

A) bonds 
B) futures 
C) insurance companies 
D) stocks

Question 18

Which of the following are considered regulated financial products?

Accepted Answer

A) S&Ls 
B) insurance companies 
C) banks 
D) stocks

Question 19

Which of the following did the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) not do?

Accepted Answer

A) injected $50 billion-raised by issuing taxpayer-financed bonds-into a newly created SAIF 
B) created the Office of Thrift Supervision (OTS) and Resolution Trust Corporation (RT
C)  
C) relaxed restrictions on the investments S&Ls could make 
D) made deposit insurance the full-faith and credit obligation of the federal government

Question 20

The Federal Reserve sets ________ for the purchase of stocks and bonds.

Accepted Answer

A) minimum prices 
B) margin requirements 
C) fees 
D) All of the above are correct.

Exam 12: Regulation of the Banking System and the Financial Services Industry