Financial Institutions Management: A Risk Management Approach 10th Edition by Anthony Saunders Test

 
D. may not have enough funds to purchase corporate securities.
 
E. All of the options.
 
89. FIs perform their intermediary function in two ways 
 
A. they specialize as brokers between savers and users.
 
B. they serve as asset transformers by purchasing primary securities and issuing secondary securities.
 
C. they serve as asset transformers by purchasing secondary securities and issuing primary securities.
 
D. they specialize as brokers between savers and users and they serve as asset transformers by purchasing primary securities and issuing secondary securities.
 
E. they specialize as brokers between savers and users and they serve as asset transformers by purchasing secondary securities and issuing primary securities.
 
 
90. Which of the following is true of secondary securities? 
 
A. They include equities, bonds, and other debt claims.
 
B. They are backed by the real assets of corporations issuing them.
 
C. They are securities that back primary securities.
 
D. They are securities issued by FIs.
 
E. They must be placed in a separate account on order for primary securities to be offered.
 
91. Each of the following is a special function performed by FIs at a macro level EXCEPT 
 
A. transmission of monetary policy.
 
B. credit allocation.
 
C. intergenerational wealth transfers or time intermediation.
 
D. denomination intermediation.
 
E. interbank lending and investing.
 
 
92. Which of the following is closely associated with credit allocation regulation? 
 
A. Support the FI's lending to socially important sectors.
 
B. Transmission of monetary policy from the Federal Reserve to the economy.
 
C. Ensure the safety and soundness of the FI.
 
D. Prevent discrimination in lending on the basis of age, race, sex, or income.
 
E. Protect investors against abuses.
 
93. Verifying the minimum level of capital or equity that must be held to fund the operations of an FI is part of the goal of 
 
A. investor protection regulation.
 
B. safety and soundness regulation.
 
C. entry regulation.
 
D. credit allocation regulation.
 
E. consumer protection regulation.
 
 
94. The Community Reinvestment Act and the Home Mortgage Disclosure Act were both passed to provide incentives to comply with 
 
A. entry regulation.
 
B. credit allocation regulation.
 
C. consumer protection regulation.
 
D. safety and soundness regulation.
 
E. investor protection regulation.
 
95. Price and quantity restrictions in regulation are usually aimed at determining whether an FI is meeting certain 
 
A. consumer protection guidelines.
 
B. credit allocation guidelines.
 
C. investor protection guidelines.
 
D. safety and soundness guidelines.
 
E. entry regulation guidelines.
 
 
96. The following are protective mechanisms that have been developed by regulators to promote the safety and soundness of the banking system EXCEPT 
 
A. encouraging banks to rely more on deposits rather than debt or capital as a cushion against failure.
 
B. encouraging banks to limit lending to a single customer to no more than 10% of capital.
 
C. the provision of deposit insurance.
 
D. the periodic monitoring of banks.
 
E. encouraging banks to produce timely accounting statements and reports.
 
97. Safety and soundness regulations include all of the following layers of protection EXCEPT 
 
A. the provision of guaranty funds.
 
B. requirements encouraging diversification of assets.
 
C. the creation of money for those FIs in financial trouble.
 
D. requiring minimum levels of capital.
 
E. monitoring and surveillance.
 
 
98. Which of the following groups of FIs have experienced the highest percentage growth in assets in the U.S. financial services industry during the past sixty years? 
 
A. Commercial banks.
 
B. Thrifts.
 
C. Life insurance companies.
 
D. Investment companies.
 
E. Finance companies.
 
99. Which of the following repealed the 1933 Glass-Steagall barriers between commercial banking, insurance, and investment banking?