Question 1

According to the textbook,traditional banking may be on the decline.

Accepted Answer

A) True 
 B)False

Question 2

Nick Rodr gets a loan from the First State Bank of Guthrie to purchase a new refrigerator for his condo.What service that a bank provides is he taking advantage of?

Accepted Answer

A) Risky arbitrage services 
B) Liquidity services 
C) Delegated monitoring services 
D) Divisibility of money services 
E) Credit services

Question 3

Current theory suggests that banks exist because of imperfections in our financial system.

Accepted Answer

A) True 
 B)False

Question 4

Nonbank financial-service institutions can offer deposits to the public,but these deposits are not eligible for insurance coverage by the FDIC.

Accepted Answer

A) True 
 B)False

Question 5

Chris Jones gets a cashier's check from Wachovia Bank to make his down payment on a new home.Which of the following roles is the bank performing?

Accepted Answer

A) The intermediation role 
B) The payments role 
C) The risk management role 
D) The guarantor role 
E) The policy role

Question 6

A(n)________ buys and sells securities on behalf of their customers and for their own accounts.Examples of this type of financial service provider include Merrill Lynch and Charles Schwab.

Accepted Answer

The answer of A(n)________ buys and sells securities on behalf...

Question 7

J.C.Penney,and Sears provided are among leading firms that in the 1980s organized competitors with banks that are known as:

Accepted Answer

A) nonbank financial-service institutions. 
B) discount security companies. 
C) savings institutions. 
D) credit unions. 
E) commercial banks.

Question 8

The Bank,N.A.accepts deposits from thousands of individuals and lends that money to (among others)the Stillwater Body Shop to expand their work bays.Which of the following roles is the bank performing?

Accepted Answer

A) The intermediation role 
B) The payments role 
C) The risk management role 
D) The guarantor role 
E) The policy role

Question 9

Which of the following are the implied motivators of reforms that have taken place in the banking sector since the credit crisis of 2007-2009?

Accepted Answer

A) Increased liquidity 
B) Increased dominance of the largest financial firms 
C) Increased disclosure of credit charges and other consumer expenses 
D) Increased number of bank branches 
E) Increased speed of innovation and invention

Question 10

The number of independently owned banks has risen in the United States over the last decade.

Accepted Answer

A) True 
 B)False

Question 11

The recent erosion of the banking market share relative to other financial institutions means that banking is a dying industry.

Accepted Answer

A) True 
 B)False

Question 12

_____________ refers to the movement of businesses across industry lines in order to broaden its base.

Accepted Answer

The answer of _____________ refers to the movement of businesses...

Question 13

The _______________________ of a bank is a traditional service where the bank manages the financial affairs and property of individuals (and in some cases businesses).

Accepted Answer

The answer of The _______________________ of a bank is a...

Question 14

According to the textbook,high-volume transactions are required to make efficient use of automation and other technological innovations.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an example of a commercial bank?

Accepted Answer

A) State and local government retirement funds 
B) Foreign banking offices in the United States 
C) Finance and mortgage companies 
D) Property/casualty and other insurers 
E) Mutual funds

Question 16

The Edmond Wine and Cheese shop wants to buy 30 cases of French Champagne on credit.Bank of America writes a letter of credit stating that the Edmond Wine and Cheese shop is a good risk and that if they do not pay off the loan,Bank of America will.Which of the following roles is the bank performing?

Accepted Answer

A) The intermediation role 
B) The payments role 
C) The risk management role 
D) The guarantor role 
E) The policy role

Question 17

Drew Davis goes to his local bank to get help developing a financial plan and making investment decisions.Which of the more recent services banks offer is Drew taking advantage of?

Accepted Answer

A) Getting a consumer loan 
B) Getting financial advice 
C) Managing cash 
D) Getting venture capital services 
E) Buying a retirement plan

Question 18

Religious opposition decreased during the Renaissance because:

Accepted Answer

A) loans to the poor often carried high interest rates. 
B) loans and deposits primarily consisted of wealthy customers. 
C) the Industrial Revolution demanded new methods of making payments and obtaining credit. 
D) savings and wealth were lost due to war,theft,and expropriation by governments. 
E) All of the options are correct.

Question 19

Banks have now expanded their service offerings into providing investment banking,insurance protection,financial planning,and other services rather than restricting themselves to traditional financial services.

Accepted Answer

A) True 
 B)False

Question 20

Smaller,locally focused commercial and savings banks that offer narrower but more personalized menu of financial services are known as:

Accepted Answer

A) money-center banks. 
B) community banks. 
C) mutual funds. 
D) state banks. 
E) fringe banks.

Exam 1: An Overview of the Changing Financial-Services Sector

According to the textbook,traditional banking may be on the decline.

Nick Rodr gets a loan from the First State Bank of Guthrie to purchase a new refrigerator for his condo.What service that a bank provides is he taking advantage of?

Current theory suggests that banks exist because of imperfections in our financial system.

Nonbank financial-service institutions can offer deposits to the public,but these deposits are not eligible for insurance coverage by the FDIC.

Chris Jones gets a cashier's check from Wachovia Bank to make his down payment on a new home.Which of the following roles is the bank performing?

A(n)________ buys and sells securities on behalf of their customers and for their own accounts.Examples of this type of financial service provider include Merrill Lynch and Charles Schwab.

J.C.Penney,and Sears provided are among leading firms that in the 1980s organized competitors with banks that are known as:

The Bank,N.A.accepts deposits from thousands of individuals and lends that money to (among others) the Stillwater Body Shop to expand their work bays.Which of the following roles is the bank performing?

Which of the following are the implied motivators of reforms that have taken place in the banking sector since the credit crisis of 2007-2009?

The number of independently owned banks has risen in the United States over the last decade.

The recent erosion of the banking market share relative to other financial institutions means that banking is a dying industry.

_____________ refers to the movement of businesses across industry lines in order to broaden its base.

The _______________________ of a bank is a traditional service where the bank manages the financial affairs and property of individuals (and in some cases businesses).

According to the textbook,high-volume transactions are required to make efficient use of automation and other technological innovations.

Which of the following is an example of a commercial bank?

The Edmond Wine and Cheese shop wants to buy 30 cases of French Champagne on credit.Bank of America writes a letter of credit stating that the Edmond Wine and Cheese shop is a good risk and that if they do not pay off the loan,Bank of America will.Which of the following roles is the bank performing?

Drew Davis goes to his local bank to get help developing a financial plan and making investment decisions.Which of the more recent services banks offer is Drew taking advantage of?

Religious opposition decreased during the Renaissance because:

Banks have now expanded their service offerings into providing investment banking,insurance protection,financial planning,and other services rather than restricting themselves to traditional financial services.

Smaller,locally focused commercial and savings banks that offer narrower but more personalized menu of financial services are known as: