TRUE
Rose - Chapter 01 #33
34.When banks serve as conduits for government policy this is referred to as their agency role.
FALSE
Rose - Chapter 01 #34
35.According to the textbook, high-volume transactions are required to make efficient use of automation and other technological innovations.
TRUE
Rose - Chapter 01 #35
36.The number of independently owned banks has risen in the United States over the last decade.
FALSE
Rose - Chapter 01 #36
37.Money-center banks usually service local communities, towns, and cities, offering a narrow menu of services to the public.
FALSE
Rose - Chapter 01 #37
38.A greater proportion of major corporations have deserted the banking system in recent years to raise borrowed funds directly from the open market.
TRUE
Rose - Chapter 01 #38
39.The recent erosion of the banking market share relative to other financial institutions means that banking is a dying industry.
FALSE
Rose - Chapter 01 #39
40.Lending institutions act as delegated monitors and can diversify and reduce their risk exposure, resulting in increased safety for savers' funds.
TRUE
Rose - Chapter 01 #40
41.Current theory suggests that banks exist because of imperfections in our financial system.
TRUE
Rose - Chapter 01 #41
42.According to the textbook, traditional banking may be on the decline.
TRUE
Rose - Chapter 01 #42
43.Convergence refers to the fact that the number of bank mergers has increased in recent years.
FALSE
Rose - Chapter 01 #43
44.Banks which offer virtually all financial services are known as universal banks.
TRUE
Rose - Chapter 01 #44
45.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.
TRUE
Rose - Chapter 01 #45
46.In the United States, a commercial bank qualifies as a "bank" under federal law if it offers:
A. consumer installment loans, CDs.
B. trust services, commercial loans.
C. checking accounts, commercial loans.
D. security investments, inventory loans to business customers.
E. commercial deposit accounts, consumer savings plans.
Rose - Chapter 01 #46
47.J.C. Penney, and Sears provided are among leading firms that in the 1980s organized competitors with banks that are known as:
A. nonbank financial-service institutions.
B. discount security companies.
C. savings institutions.
D. credit unions.
E. commercial banks.
Rose - Chapter 01 #47
48.A study of history shows that one of the first services offered by banks was:
A. equipment leasing.
B. currency exchange.
C. security brokerage and underwriting.
D. sale of real estate.
E. None of the options are correct
Rose - Chapter 01 #48
49.Banks perform the indispensable task of:
A. creating money without making loans.
B. absorbing the excess liquidity created by other financial institutions.
C. intermediating between surplus-spending parties and deficit-spending parties.
D. issuing risky deposits.
E. None of the options are correct
Rose - Chapter 01 #49
50.The view that depositors hire banks to analyze the financial condition of prospective borrowers and continually evaluate the condition of outstanding loans is referred to as:
A. delegated monitoring.
B. the concept of financial intermediation.
C. the liquidity function in banking.