Bank Management 8th edition by Timothy W. Koch Test bank

 Chapter 1
Banking and the Financial Services Industry
 
Multiple Choice

 

1. Which act separated commercial banking, investment banking and insurance into three separate industries?

1. Glass-Steagall Act
2. Bank Holding Company Act
3. McFadden Act
4. Federal Reserve Act
5. Competitive Equality Banking Act

Answer: a
 

2. Which act limited the activities a company could engage in if it owned a bank?

1. Federal Reserve Act
2. Bank Holding Company Act
3. McFadden Act
4. Glass-Steagall Act
5. Competitive Equality Banking Act

Answer: b
 

3. Which of the following mortgage types were offered to “subprime” borrowers?

1. Interest Only
2. Option Adjustable-Rate
3. Principal Only
4. All of the above
5. a. and b. only

Answer: e
 

4. The U.S. government took all of the following actions to address the credit crisis in 2008 except:

1. putting Fannie Mae into conservatorship.
2. passed the Troubled Asset Relief Program (TARP).
3. created the Keep Banks Solvent (KBS) agency.
4. authorized large non-financial firms to sell bonds that were FDIC-insured.
5. temporarily increased FDIC domestic deposit coverage to $250,000.

Answer: c


Full download link: https://reurl.cc/m3D0qW
 

5. At the end of 2008, which of the following investment banks remained independent?

1. Bear Stearns
2. Goldman Sachs
3. Lehman Brothers
4. Merrill Lynch
5. a. and b.

Answer: b
 

6. In 2008, the U.S. Treasury financial supported financial institutions by:

1. purchasing troubled assets.
2. buying preferred stock in some financial institutions.
3. issuing guarantees on money market funds.
4. increasing the deposit insurance limit.
5. all of the above.

Answer: e
 

7. Which of the following is false regarding community banks?

1. They typically have extensive operations in specific regions of the country.
2. They typically operate in a limited geographic area.
3. They often focus on lending to small businesses.
4. The bulk of their funding comes from deposits.
5. They tend to grow at a modest rate.

Answer: a
 

8. __________ have a large international presence.

1. Global banks
2. Nationwide banks
3. Super regional banks
4. Regional banks
5. Specialty Banks

Answer: a

 

9. An “independent” bank is:

1. an “independent” subsidiary of a multi-bank holding company.
2. another name for a one-bank holding company.
3. a bank that is exempt from paying federal income taxes.
4. a bank that is specifically created to underwrite corporate debt issues.
5. not controlled by a multi-bank holding company or any other outside interest.

Answer: e