B. Increased restructuring of loans
C. Degradation of market share
D. Reduction of public trust and confidence in the system.
E. Increase in risky arbitrage services
90.Which one of the following nonbank financial-service institutions sell shares to the public representing an interest in a professionally managed pool of stocks, bonds, and other securities?
A. Security brokers and dealers
B. Investment banks
C. Finance companies
D. Mutual funds
E. Hedge funds
91.Which of the following activities do the banks perform as dealers in arranging for risk protection for customers from third parties?
A. Hedging services
B. Merchant banking services
C. Investment banking services
D. Mutual funds services
E. Security underwriting services
92.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?
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
ch1 Key
1._______________________ is a traditional service provided by banks in which the banks store the valuables of their customers and certify their true value.
Safekeeping of valuables and Certification of Value
Rose - Chapter 01 #1
2.The fact that financial institutions monitor the financial condition of their borrowers by serving only as an agent on behalf of depositors is the _______________________ theory of banking.
delegated monitoring
Rose - Chapter 01 #2
3._______________________ refers to when a financial institution trades one form of currency for another. An example of this would be when the bank trades dollars for yen.
Currency exchange
Rose - Chapter 01 #3
4.A(n) _______________________ is a traditional service which permits a depositor to write a draft in payment for goods and services.
demand deposit (checking account)
Rose - Chapter 01 #4
5._______________________ is a service provided by banks where the bank lends money to individuals for the purchase of durable and other goods.
Consumer lending
Rose - Chapter 01 #5
6.The _______________________ of a bank is a traditional service where the bank manages the financial affairs and property of individuals (and in some cases businesses).
trust services
Rose - Chapter 01 #6
7.Companies such as Merrill Lynch and Sears which offered some but not all banking services in the 1980s were called ______________________.
nonbank financial firms
Rose - Chapter 01 #7
8.The loosening of government regulation and control of financial institutions is called ______________________.
government deregulation
Rose - Chapter 01 #8
9.___________________________ is an alternative to lending in which the financial institution purchases the equipment and rents it to its customers.
Equipment leasing services
Rose - Chapter 01 #9
10.The ___________________________ is a landmark act which allows financial service providers to offer an expanded menu of financial services for the customer. This law allows banks to truly become conglomerate financial service providers.
Financial Services Modernization Act (Gramm-Leach-Bliley Act)
Rose - Chapter 01 #10
11.The country with the most banks is ______________________.
the United States
Rose - Chapter 01 #11
12.According to Congress, a ____________ is defined as any institution that can qualify for deposit insurance administered by the FDIC.
bank
Rose - Chapter 01 #12
13.A bank which spans regions, nations, and continents, offering the widest menu of financial services is known as a _________ bank.