Finance Timed Homework 100 MCQs

Question 1
Which of the following trading practices is forbidden in the secondary market?
I. Trading on information that gives corporate insiders an unfair advantage over the public
II. Trading designed to manipulate securities prices at the expense of the public
III. Trading before true and adequate disclosure has been made to the public
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Question 2
Question text
A primary offering occurs when
Select one:
A. previously issued securities are traded among investors.
B. a company's previously issued securities are traded by a single broker.
C. corporations issue securities in order to secure additional financing.
D. purchases of marketable securities are made by the issuing company.

Question 3
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Question text

Which of the following securities provisions created the Securities Exchange Commission (SEC) to enforce
securities laws and regulate U.S. securities markets?
Select one:
A. The Securities Act of 1933
B. The Securities Exchange Act of 1934
C. Rule 415
D. Reg ATS

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Question text
Which of the following is true concerning commercial paper?
I. Commercial paper is offered in short-term maturities suitable for the money market
II. All public corporations qualify to issue commercial paper
III. The cost to the issuer of raising funds using commercial paper is usually lower than borrowing at the
prime lending rate
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Question 5
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Question text
Common money market instruments used by importers to guarantee funds owed to exporters are known as
Select one:
A. negotiable certificates of deposit.
B. bankers' acceptances.
C. garnishment agreements.
D. repurchase agreements.

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Secondary markets:
I. Allow investors to buy or sell previously issued securities
II. Provide additional funds to corporations when securities are traded
III. Promote market pricing competition for securities
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Question 7
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The majority of debt financing for U.S. corporations is raised on
Select one:
A. the OTC market.
B. the NYSE.
C. ECNs.
D. None of the above.

Question 8
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Which of the following securities provisions required registration and full disclosure of new securities
being issued in the U.S.?
Select one:
A. The Securities Act of 1933
B. The Securities Exchange Act of 1934
C. Rule 415 (shelf registration)
D. Reg ATS (alternative trading system)

Question 9
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Question text
The NASDAQ Exchange:
I. Is divided into two market segments, a "National Market," and a "Small-Cap Market"
II. Is less restrictive in its requirements for membershipies than the New York Stock Exchange (NYSE)
III. Offers "unlisted" securities to investors
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Question 10
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Question text
Funds flow from __________ to __________ in the primary markets.
Select one:
A. investors; issuing corporations
B. investors; other investors
C. issuing corporations; investors
D. All of the above.

Question 11

Which of the following is NOT true of the NASDAQ exchange?
I. It is located on Wall Street, where brokers transact business for clients
II. It was once operated by the National Association of Securities Dealers (NASD)
III. It is a publicly-owned, not-for-profit exchange
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Question 12
Question text
Secondary markets typically provide:
I. Liquidity
II. Price competition
III. Deposit insurance
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Question 13
Question text
Commercial paper securities
Select one:
A. carry an interest rate that varies according to the firm's level of risk.
B. never have a term to maturity that exceeds 270 days.
C. are issued only by the largest and most creditworthy corporations, as they are unsecured.
D. all of the above.
E. only A and B of the above.

Question 14
Question text
In situations where asymmetric information problems are not severe,
Select one:
A. the money markets have a distinct cost advantage over banks in providing short-term funds.
B. the money markets cannot allocate short-term funds as efficiently as banks can.
C. banks have a distinct cost advantage over the money markets in providing short-term funds.
D. the money markets have a distinct cost advantage over banks in providing long-term funds.

Question 15
Question text
Money market transactions
Select one:
A. are usually arranged purchases and sales between participants over the phone by traders and
completed electronically.
B. do not take place in any one particular location or building.
C. both (a) and (b).
D. none the the above.

Question 16
Question text
Which of the following statements about money market securities are true?
Select one:
A. There is no well-developed secondary market for commercial paper.
B. The interest rates on all money market instruments move very closely together over time.
C. The secondary market for Treasury bills is extensive and well developed.
D. All of the above are true.
E. Only A and B of the above are true.

Question 17
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Money market instruments:
I. Typically have low default risk
II. Have short-term maturities
III. Are usually sold in large denominations
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III

Question 18
Question text
The primary function of large diversified brokerage firms in the money market is to
Select one:
A. make a market for money market securities by maintaining an inventory from which to buy or sell.

B. buy T-bills from the U.S. Treasury Department.
C. buy money market securities from corporations that need liquidity.
D. sell money market securities to the Federal Reserve for its open market operations.

Question 19
Question text
Compared to money market securities, capital market securities have
Select one:
A. less risk.
B. longer maturities.
C. more liquidity.
D. lower yields.

Question 20
Question text
Treasury bonds are subject to _________ risk but are free of _________ risk.
Select one:
A. interest-rate; underwriting
B. default; interest-rate
C. interest-rate; default
D. default; underwriting

Question 21
A firm will borrow long-term
Select one:
A. if short-term interest rates are expected to decline during the term of the debt.
B. if the extra interest cost of borrowing short-term due to rising interest rates does not exceed the
expected premium that is paid for borrowing long term.
C. if the extra interest cost of borrowing long-term is less than the expected cost of rising interest rates
before it retires its debt.
D. if long-term interest rates are expected to decline during the term of the debt.

Question 22
Question text
Capital market trading occurs in
Select one:

A. the primary market.
B. the secondary market.
C. both A and B
D. none of the above.

Question 23
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Bonds
Select one:
A. are securities that represent a debt owed by the issuer to the investor.
B. obligate the issuer to pay a specified amount at a given date, generally without periodic interest
payments.
C. both A & B.
D. none of the above.

Question 24
Question text
Long-term unsecured bonds that are backed only by the general creditworthiness of the issuer are called
Select one:
A. convertible bonds.
B. junk bonds.
C. debentures.
D. callable bonds.

Question 25
Question text
Which of the following is true of Electronic Communications Networks (ECNs)?
I. Transactions costs are lower for ECN trades
II. All unfilled orders are available for review by ECN traders
III. ECNs tend to work well for thinly-traded stocks
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only

Question 26
Question text

Which of the following statements about trading operations in an organized ("floor") exchange is correct?
I. Floor traders all deal in a wide variety of stocks
II. In most trades, specialists buy for or sell from their own inventories
III. In most trades, specialists match buy and sell orders.
Select one:
A. I only
B. II only
C. III only
D. I and II only
E. II and III only

Question 27
Question text
Preferred stockholders hold a claim on assets that has priority over the claims of
Select one:
A. common stockholders, but after that of bondholders.
B. bondholders, but after that of common stockholders.
C. neither common stockholders nor bondholders.
D. both common stockholders and bondholders.

Question 28
Question text
Securities not listed on one of the exchanges trade in the over-the-counter market. In this exchange, dealers
"make a market" by
Select one:
A. selling stocks from inventory when investors want to buy.
B. buying stocks for inventory when investors want to sell.
C. doing both of the above.
D. doing neither of the above.

Question 29
Question text
How does over-the-counter (OTC) trading differ from trading on an organized exchange?
I. Requirements for trading OTC are less restrictive than on organized exchanges
II. Trading cannot be done electronically on organized exchanges
III. No publicly-traded stocks can be offered OTC
Select one:
A. I only
B. I and II only
C. I and III only

D. II and III only
E. I, II, and III

Question 30
Question text
Which of the following is an objective of the Securities and Exchange Commission?
I. Maintain the integrity of the securities markets
II. Require firms to provide specific information to investors
III. Regulate major participants in securities markets
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III

Question 31
Which of the following are important ways in which mortgage markets differ from stock and bond
markets?
Select one:
A. The usual borrowers in capital markets are government entities, whereas the usual borrowers in
mortgage markets are small businesses.
B. The usual borrowers in capital markets are government entities and large businesses, whereas the
usual borrowers in mortgage markets are small businesses.
C. The usual borrowers in capital markets are businesses and government entities, whereas the usual
borrowers in mortgage markets are individuals.
D. The usual borrowers in capital markets are government entities and large businesses, whereas the
usual borrowers in mortgage markets are small businesses and individuals.

Question 32
Question text
The Federal Housing Administration (FHA)
Select one:
A. provides insurance for certain mortgage contracts.
B. was set up to buy mortgages from thrifts so that these institutions could make more loans.
C. funds purchases of mortgages by selling bonds to the public.
D. all of the above.

E. only A and B of the above.

Question 33
Question text
Which of the following are important ways in which mortgage markets differ from the stock and bond
markets?
Select one:
A. Because mortgages are made for different amounts and different maturities, developing a secondary
market has been more difficult.
B. Most mortgages are secured by real estate, whereas the majority of capital market borrowing is
unsecured.
C. The usual borrowers in the capital markets are government entities and businesses, whereas the
usual borrowers in the mortgage markets are individuals.
D. All of the above are important differences.
E. Only A and B of the above are important differences.

Question 34
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The most common type of mortgage-backed security is
Select one:
A. the participation certificate, a security which passes the borrower's mortgage payments equally
among all the owners of the certificates.
B. collateralized mortgage obligations, a security which reduces prepayment risk.
C. the mortgage pass-through, a security that has the borrower's mortgage payments pass through the
trustee before being disbursed to the investors.
D. the securitized mortgage, a security which increases the liquidity of otherwise illiquid mortgages.

Question 35
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Mortgage-backed securities
Select one:
A. are securities collateralized by both insured and uninsured mortgages.
B. have been growing in popularity in recent years as institutional investors look for attractive
investment opportunities.
C. are securities collateralized by a pool of mortgages.
D. all of the above.
E. only A and B of the above.

Question 36
Question text

The Federal National Mortgage Association (Fannie Mae)
Select one:
A. funds purchases of mortgages by selling bonds to the public.
B. was set up to buy mortgages from thrifts so that these institutions could make more loans.
C. provides insurance for certain mortgage contracts.
D. all of the above.
E. only A and B of the above.

Question 37
Question text
When the exchange rate changes from 1.0 euros to the dollar to 0.8 euros to the dollar, then the euro has
_________ and the dollar has _________.
Select one:
A. appreciated; appreciated
B. depreciated; depreciated
C. appreciated; depreciated
D. depreciated; appreciated

Question 38
Question text
Which of the following causes a depreciation of the domestic currency?
I. A lower expected domestic inflation rate.
II. A decrease in the domestic money supply.
III. A decline in the domestic real interest rate.
Select one:
A. I only
B. II only
C. III only
D. I and II only
E. II and III only

Question 39
Question text
If the demand for _________ goods decreases relative to _________ goods, the domestic currency will
depreciate.
Select one:
A. domestic; domestic
B. foreign; foreign
C. foreign; domestic

D. domestic; foreign

Question 40
Question text
Increased demand for a country's _________ causes its currency to appreciate in the long run, while
increased demand for _________ causes its currency to depreciate.
Select one:
A. imports; exports
B. imports; imports
C. exports; imports
D. exports; exports

Question 41
Question text
When the exchange rate for the euro changes from $1.20 to $1.00, then, holding everything else constant,
the euro has
Select one:
A. depreciated and American wheat sold in Germany becomes less expensive.
B. appreciated and German cars sold in the United States become more expensive.
C. appreciated and German cars sold in the United States become less expensive.
D. depreciated and American wheat sold in Germany becomes more expensive.

Question 42
Question text
An increase in the foreign interest rate causes __________ in the demand for __________ currency and the
foreign currency to appreciate.
Select one:
A. an increase; domestic
B. a decrease; foreign
C. an increase; foreign
D. none of the above

Question 43
Question text
A lower domestic money supply causes the domestic currency to
Select one:
A. depreciate in the long run.
B. appreciate in the short run.

C. depreciate in the short run.
D. do both A and B of the above.
E. do both B and C of the above.

Question 44
Question text
The _________ states that exchange rates between any two currencies will adjust to reflect changes in the
price levels of the two countries.
Select one:
A. quantity theory of money
B. theory of purchasing power parity
C. law of one price
D. theory of money neutrality

Question 45
Question text
A spot transaction in the foreign exchange market involves the
Select one:
A. immediate (within two days) exchange of exports and imports.
B. exchange of bank deposits at a specified future date.
C. exchange of exports and imports at a specified future date.
D. immediate (within two days) exchange of bank deposits.

Question 46
Question text
When an increase in the money supply causes the exchange rate to fall by more in the short run than it does
in the long run, it is called
Select one:
A. exchange rate overshooting.
B. the J-curve effect.
C. exchange rate disequilibrium.
D. none of the above.

Question 47
Question text
The Bretton Woods system was one in which central banks
Select one:
A. agreed to limit domestic money growth to the average of the five largest industrial nations.

B. agreed not to intervene in the foreign exchange market to maintain a fixed exchange rate regime
that had existed prior to World War I.
C. agreed to limit domestic money growth to the average of the seven largest industrial nations.
D. bought and sold their own currencies to keep their exchange rates fixed.

Question 48
Question text
A foreign exchange intervention with an offsetting open market operation that leaves the monetary base
unchanged is called
Select one:
A. an exchange rate feedback rule.
B. an unsterilized foreign exchange intervention.
C. a money neutral foreign exchange intervention.
D. a sterilized foreign exchange intervention.

Question 49
Question text
The difference between merchandise exports and imports is called the
Select one:
A. capital account balance.
B. current account balance.
C. balance of payments.
D. trade balance.

Question 50
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The official reserve transactions balance is referred to as
Select one:
A. the capital account.
B. the current account.
C. net change in government international reserves.
D. the trade balance.

Question 51
Question text
The Bretton Woods agreement created the _________, which was given the task of promoting the growth
of world trade by setting rules for the maintenance of fixed exchange rates and by making loans to
countries that were experiencing balance of payments difficulties.

Select one:
A. European Exchange Rate Mechanism (ERM)
B. IMF
C. Bank of International Settlements
D. Central Settlements Bank
E. World Bank

Question 52
Question text
The Bretton Woods agreement set up the _________, which currently provides long-term loans to assist
developing countries to build dams, roads, and other physical capital that contributes to economic
development.
Select one:
A. Central Settlements Bank
B. World Bank
C. International Monetary Fund
D. European Exchange Rate Mechanism (ERM)
E. Bank of International Settlements

Question 53
Question text
A dirty float is when:
Select one:
A. The value of a currency is pegged relative to an anchor currency
B. The value of a currency is pegged relative to the value of one other currency
C. Countries intervene in foreign exchange markets in an attempt to influence their exchange rates by
buying and selling foreign assets
D.
The value of a currency is allowed to freely fluctuate against all other currencies

Question 54
Question text
When the central bank allows the purchase or sale of domestic currency to have an effect on the monetary
base, it is called
Select one:
A. a money neutral foreign exchange intervention.
B. an exchange rate feedback rule.
C. a sterilized foreign exchange intervention.

D. an unsterilized foreign exchange intervention.

Question 55
Question text
What is the bookkeeping system for recording all receipts and payments that have a direct bearing on the
movement for funds between a nation and foreign countries?
Select one:
A. Current Account
B. Trade balance
C. Balance of payments
D. Capital Account

Question 56
Question text
The current account balance plus the capital account balance equals
Select one:
A. the trade balance.
B. the amount of unsterilized exchange market intervention.
C. the net change in government international reserves.
D. both A and C of the above.

Question 57
Question text
The bundling of GNMA-guaranteed mortgages into a saleable security (usually for large institutional
investors) is called
Select one:
A. disintermediation.
B. hedge optioning.
C. securitization.
D. futures bundling.
E. quasi-intermediation.

Question 58
Question text
The main center of the Eurodollar market is
Select one:
A. London.
B. Basel.

C. New York.
D. Paris.

Question 59
Question text
The practice of creating marketable debt instruments that are backed by otherwise illiquid assets is known
as
Select one:
A. standardization.
B. securitization.
C. adverse selection.
D. homogenization.

Question 60
Question text
Investment banking activities of the commercial banks were blamed for many bank failures. This led to
Select one:
A. the passage of the Garn-St. Germain Act of 1982.
B. the passage of the Glass-Steagall Act of 1933.
C. the passage of the National Bank Charter Amendments Act of 1918.
D. the passage of the National Bank Act of 1863.
E. the establishment of the Federal Deposit Insurance Corporation in 1933.

Question 61
Question text
In recent years, commercial banks have been allowed to
Select one:
A. enter certain insurance markets.
B. invest in real estate.
C. underwrite stocks.
D. do all of the above.
E. only A and B of the above.

Question 62
Question text
The legislation that effectively prohibited banks from branching across state lines and forced all national
banks to conform to the branching regulations of the state in which they reside is the
Select one:

A. Glass-Steagall Act.
B. Garn-St. Germain Act.
C. McFadden Act.
D. National Banking Act.

Question 63
Question text
High-yield bonds rated below investment grade by the bond-rating agencies are frequently referred to as
Select one:
A. "fallen angels."
B. municipal bonds.
C. Yankee bonds.
D. junk bonds.

Question 64
Question text
Which regulatory body charters national banks?
Select one:
A. The Comptroller of the Currency
B. The Federal Reserve
C. The Federal Deposit Insurance Corporation
D. None of the above

Question 65
Question text
The most important developments that have reduced banks' income advantages in the past twenty years
include
Select one:
A. the growth of the junk bond market.
B. the growth of the commercial paper market.
C. the elimination of Regulation Q ceilings.
D. all of the above.
E. only A and B of the above.

Question 66
Question text
The Riegle-Neal Act of 1994
Select one:

A. required all banks to become universal banks.
B. allowed banks to underwrite insurance and securities and engage in real estate activities.
C. removed ceilings on bank deposit interest rates.
D. overturned prohibitions on interstate banking and branching.

Question 67
Question text
Credit unions' main type of loans is:
Select one:
A. Home mortgage and auto loans
B. Small business loans
C. Credit card loans
D. Nonresidential real estate loans

Question 68
Question text
The S & L Crisis in the 1980s
Select one:
A. was at the time, the most severe financial crisis since the Great Depression
B. was exacerbated by the practice of borrowing short and lending long
C. was not affected by regulatory forbearance
D. Both A and B are correct

Question 69
Question text
Credit unions are characterized by:
I. Common-bond membership
II. Non-profit, tax-exempt status
III. Mutual ownership
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III

Question 70
Question text

The Federal Deposit Insurance Corporation Improvement Act (FDICA) of 1991
Select one:
A. Recapitalized the FDIC
B. Limited brokered deposits and the too-big-to fail policy
C. Instructed the FDIC to establish risk-based premiums
D. did all of the above.
E. did only A and B of the above.

Question 71
Question text
The Competitive Equality in Banking Act of 1987
Select one:
A. discouraged regulators from pursuing regulatory forbearance.
B. encouraged regulators to continue their policy of regulatory forbearance.
C. directed regulators to close "zombie S&Ls" as quickly as administratively possible.
D. did both A and B of the above.

Question 72
Question text
The main source of funds at savings and loan associations is
Select one:
A. borrowing in the capital market.
B. deposits.
C. equity capital.
D. borrowing in the money market.

Question 73
Question text
To act in the tax payer's interest and low costs to the deposit insurance agency, regulators must
Select one:
A. set tight restrictions on holding assets that are too risky.
B. not adopt a stance of regulatory forbearance.
C. impose high capital requirements.
D. all of the above.

Question 74

Question text
Since the early 1990s, the number of savings and loan associations has _________ and the average size (in
assets) has _________.
Select one:
A. risen; risen
B. risen; declined
C. declined; declined
D. declined; risen

Question 75
Question text
The major provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989
included:
I. Establishing the Resolution Trust Corporation to manage and liquidate insolvent thrifts
II. Increased deposit insurance
III. Implementing new lending restrictions
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III

Question 76
Question text
Since 1993, the number of savings and loan associations has
Select one:
A. risen slightly.
B. held steady.
C. declined substantially.
D. risen sharply.

Question 77
Question text
Which of the following is true concerning multilateral financial institutions? Multilaterals:
Select one:
A. receive primary funding from the world's major industrialized nations.
B. offer official development assistance to developing countries.
C. have been criticized for driving countries further ito debt and financial vulnerability.

D. All of the above.

Question 78
Question text
Faced with a continuing drain of U.S. gold reserves, the U.S. chose to
Select one:
A. allow interest rates to rise in order to attract gold back into U.S. vaults.
B. lower the exchange ratio of dollars to gold from 1/35 ounce to 1/70 ounce.
C. eliminate the redemption of foreign-held U.S. dollars for gold.
D. end the military draft in an effort to boost U.S. productivity.

Question 79
Question text
Today's major industrialized nations are using a foreign exchange system known as
Select one:
A. managed float
B. pegged rates
C. free float
D. fixed rates

Question 80
Question text
The The International Monetary Fund (IMF):
I. Is considered to be the international lender of last resort.
II. Is primarily responsible for determining U.S. monetary policy and short-term interest rates.
III. Makes structural adjustment loans, which are often extended, to countries with a variety of debt-related
problems.
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Question 81
Question text
Under a system of floating exchange rates, which of the following conditions would the Canadian dollar
tend to appreciate in value against the U.S. dollar?
Select one:
A. Canadian banks offer lower rates of interest than U.S. banks.

B. The rate of inflation in Canada is lower than in the U.S.
C. There is a rising demand for U.S. goods on the part of Canadian consumers.
D. Canadians perceive that the U.S. is about to experience higher economic growth.

Question 82
Question text
Which of the following will lead an American to exchange U.S. dollars for British pounds?
Select one:
A. Importing a case of British salmon
B. Purchasing a cottage in the British countryside
C. Investing in a British manufacturing company
D. All of the above

Question 83
Question text
The Bank for International Settlements (BIS)
Select one:
A. provides short-term bridge loans to nations facing an immediate financial crisis.
B. is a "think-tank" for central bankers in matters concerning international finance.
C. is considered to be authoritative concerning matters of international finance.
D. all of the above.

Question 84
Question text
The foreign-exchange system adopted at the Bretton Woods Conference can be characterized as a
Select one:
A. traditional gold standard.
B. floating exchange standard.
C. fixed exchange standard.
D. non-interventionist standard.

Question 85
Question text
Which of the following was a managed float agreement signed by the major industrialized nations in 1987?
Select one:
A. The Greenspan Currency Control Act
B. The Western Currency Management Agreement
C. The Geneva Exchange Rate Accord

D. The Louvre Currency Stabilization Accord

Question 86
Question text
An inflow of U.S. dollars to the U.S. Balance of Payments account will occur when
Select one:
A. the U.S. buys foreign currency in international markets.
B. the U.S. donates foreign aid to other countries.
C. Americans make investments in foreign assets.
D. the U.S. exports merchandise to foreign countries.

Question 87
Question text
All else held constant, the near-term result of a decrease in the exchange value of country A's currency
against country B's currency would most likely
Select one:
A. increase A's exports to B.
B. decrease B's trade deficit with A.
C. increase B's exports to A.
D. decrease B's imports from A.

Question 88
Question text
Which of the following multilateral institutions provides long-term development loans to governments of
developing nations?
Select one:
A. The BIS
B. The IMF
C. The World Bank
D. All of the above

Question 89
Question text
Corporations with a controlling interest in one or more affiliated banks are known as
Select one:
A. commercial banks.
B. bank holding companies.
C. government sponsored enterprises.

D. mutual fund companies.

Question 90
Question text
Credit unions:
I. Offer their members savings and checking services similar to those of commercial banks
II. Are non-profit entities that typically pass cost savings on to members
III. Are insured by the Federal Deposit Insurance Corporation (FDIC)
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Question 91
Question text
Which of the following statements is true international banking?
I. The explosive growth in Eurodollar lending has led to an increase in the number of U.S. branch banks
abroad
II. Due to trade restrictions, foreign banks have not been successful in the U.S., where they do very little
banking
III. Stricter regulations abroad makes international banking more expensive for U.S. banks
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III

Question 92
Question text
Which of the following statements is true regarding bank charters?
I. National banks are chartered by the U.S. comptroller of the currency.
II. Banks may be chartered at either the national or state level.
III. Only nationally-chartered banks can be members of the Federal Reserve System
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Question 93
Question text
Which of the following, enacted in 1933 for the purpose of separating commercial and investment banking
in the U.S., was repealed in 1999 by passage of the Gramm-Leach-Bliley Act?
Select one:
A. The Glass-Steagall Act
B. The Stevens-Seagal Act
C. The Morgan-Stanley Act
D. The Commercial Securities Act

Question 94
Question text
Most domestic banks in the U.S. are
Select one:
A. nationally chartered.
B. state chartered.
C. members of the Federal Reserve System.
D. all of the above.

Question 95
Question text
By law, credit unions are:
I. Not-for-profit depository intermediaries
II. Tax-exempt financial institutions
III. Disallowed from engaging in any business lending
Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III

Question 96
Question text
Financial holding companies are:
I. Companies that hold a variety of different types of financial institutions
II. Are currently being regulated by the U.S. Office of the Comptroller of the Currency
III. Cannot hold both depository and non-depository financial intermediaries
Select one:
A. I only

B. I and II only
C. I and III only
D. II and III only
E. I, II, and III

Question 97
Question text
Which of the following is true concerning depository financial intermediaries?
I. They are important to the channeling of funds between lenders and borrowers.
II. They are chartered and regulated in an effort to protect depositors and the financial system.
III. They are required to make loans to anyone with an adequate credit score.
Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Question 98
Question text
A large domestic bank with headquarters in New York City that provides international lending and
payments services to large, multinational business firms is most likely to be a:
Select one:
A. Money Center bank
B. Regional bank
C. Mid-Market bank
D. Community bank

Question 99
Question text
The difference between what a commercial bank pays for its deposits and what it earns on its loans is called
the
Select one:
A. margin interest or lending spread.
B. earnings before interest and taxes.
C. return on shareholder's investment.
D. underwriting spread.

Question 100
Question text

Which of the following acts broke down the wall of separation between securities underwriting and
commercial lending?
Select one:
A. Gramm-Leach-Bliley Financial Services Modernization Act
B. Riegle-Neal Interstate Banking and Branching Efficiency Act (IBBEA)
C. Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
D. None of the above