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Test Bank For Bank Management And Financial Services, 9th Edition - Document preview page 1

Test Bank For Bank Management And Financial Services, 9th Edition - Page 1

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Test Bank For Bank Management And Financial Services, 9th Edition

Find everything you need to prepare for your exams in Test Bank For Bank Management And Financial Services, 9th Edition, a comprehensive guide filled with solved questions.

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Test Bank For Bank Management And Financial Services, 9th Edition - Page 1 preview imageChapter 01An Overview of the Changing Financial-Services SectorFill in the Blank Questions1._______________________ is a traditional service provided by banks in which the banks storethe valuables of their customers andcertify their true value.________________________________________2.The fact that financial institutions monitor the financial condition of their borrowers by serving onlyas an agent on behalf of depositors is the_______________________ theory of banking.________________________________________3._______________________ refers to when a financial institution trades one form of currency foranother. An example of this would be when the bank tradesdollars for yen.________________________________________4.A(n) _______________________ is a traditional service which permits a depositor to write a draftin payment for goods and services.________________________________________5._______________________ is a service provided by banks where the bank lends money toindividuals for the purchase of durable and other goods.________________________________________6.The _______________________ of a bank is a traditional service where the bank manages thefinancial affairs and property of individuals (and in some cases businesses).________________________________________7.Companies such as Merrill Lynch and Sears which offered some but not all banking services inthe 1980s were called ______________________.________________________________________8.The loosening of government regulation and control of financial institutions is called______________________.________________________________________
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 2 preview image
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 3 preview image9.___________________________ is an alternative to lending in which the financial institutionpurchases the equipment and rents it to its customers.________________________________________10.The ___________________________ is a landmark act which allows financial service providersto offer an expanded menu of financial services for the customer. This law allows banks to trulybecome conglomerate financial service providers.________________________________________11.The country with the most banks is ______________________.________________________________________12.According to Congress, a ____________ is defined as any institution that can qualify for depositinsuranceadministered by the FDIC.________________________________________13.A bank which spans regions, nations, and continents, offering the widest menu of financialservices is known as a _________ bank.________________________________________14._____________ refers to the movement of businesses across industry lines in order to broadenits base.________________________________________15.Banks which serve primarily households and small firms are known as ____________ banks.________________________________________16.Banks that sell deposits and make loans to businesses, individuals, and institutions are known as_____________ banks.________________________________________17.Banks which underwrite issues of new securities on behalf their corporate customers are knownas ________ banks.________________________________________18.Banks which function under a federal charter through the Comptroller of the Currency in theUnited States are known as ____________ banks.________________________________________
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 4 preview image19.Banks which supply both debt and equity capital to businesses are known as _________ banks.________________________________________20.A bank that offers its services only over the Internet is known as a(n) _______.________________________________________21.When a local merchant sells the accounts receivables they hold against their customer to a bankthis generally known as _______.________________________________________22.A(n) ________ offers loans to commercial enterprises (such as appliance dealers) and toindividuals and families using funds borrowed in the open market or from other financialinstitutions.________________________________________23.A(n) ________ buys and sells securities on behalf of their customers and for their own accounts.Examples of this type of financial service provider include Merrill Lynch and Charles Schwab.________________________________________24.A(n) ________ sells shares mainly to upscale investors in a broad group of different kinds ofassets including nontraditional investments in commodities, real estate, loans to new and ailingcompanies, and other risky assets.________________________________________25.When a bank agrees to handle the cash collections and disbursements for a company and investany temporary cash surpluses in interest bearing assets, theyare providing ________ services totheir customers.________________________________________True / False Questions26.Under U.S. federal law, an institution making only loans to households and offering uninsuredcheckable deposits andsavings deposits qualifies as a commercial bank.TrueFalse
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 5 preview image27.Nonbank financial-service institutions can offer deposits to the public, but these deposits are noteligible for insurance coverage by the FDIC.TrueFalse28.The etymological roots of the word "bank" trace this word back to an Italian term referring to a"money-changer's table".TrueFalse29.According to the textbook, the largest banks tend to offer the widest range of services of anyfinancial-service firm today.TrueFalse30.According to the delegated monitoring theory, the bank serves as an agent on behalf of itsdepositors, monitoring the financial condition of those customers who receive loans from them.TrueFalse31.Managing thefinancial affairs and property of individuals and business firms falls under the typeof banking service line known as cash management services.TrueFalse32.The role performed by banks in the economy in which they transform savings into credit is knownas the intermediation role.TrueFalse33.The role performed by banks in which they guarantee to make payments on behalf of theircustomers when those customers are unable to pay a debt obligation is known as the guarantorrole.TrueFalse34.When banks serve as conduits for government policy this is referred to as their agency role.TrueFalse35.According to the textbook, high-volume transactions are required to make efficient use ofautomation and other technological innovations.TrueFalse36.The number of independently owned banks has risen in the United States over the last decade.TrueFalse
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 6 preview image37.Money-center banks usually service local communities, towns, and cities, offering a narrow menuofservices to the public.TrueFalse38.A greater proportion of major corporations have deserted the banking system in recent years toraise borrowed funds directly from the open market.TrueFalse39.The recent erosion of thebanking market share relative to other financial institutions means thatbanking is a dying industry.TrueFalse40.Lending institutions act as delegated monitors and can diversify and reduce their risk exposure,resulting in increased safety for savers' funds.TrueFalse41.Current theory suggests that banks exist because of imperfections in our financial system.TrueFalse42.According to the textbook, traditional banking may be on the decline.TrueFalse43.Convergence refers to the fact that the number of bank mergers has increased in recent years.TrueFalse44.Banks which offer virtually all financial services are known as universal banks.TrueFalse45.Banks have now expanded their service offerings into providing investment banking, insuranceprotection, financial planning, and other services rather than restricting themselves to traditionalfinancial services.TrueFalseMultiple Choice Questions
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 7 preview image46.In the UnitedStates, 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.47.J.C. Penney, and Sears provided are among leading firms that in the 1980s organizedcompetitors with banks that are known as:A.nonbankfinancial-service institutions.B.discount security companies.C.savings institutions.D.credit unions.E.commercial banks.48.A study of history shows that one of the first services offered by banks was:A.equipmentleasing.B.currency exchange.C.security brokerage and underwriting.D.sale of real estate.E.None of the options are correct49.Banks perform the indispensable task of:A.creatingmoney 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 arecorrect
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 8 preview image50.The view that depositors hire banks to analyze the financial condition of prospective borrowersand continually evaluate the condition of outstanding loans is referred to as:A.delegated monitoring.B.theconcept of financial intermediation.C.the liquidity function in banking.D.market imperfection theory.E.the efficiency contribution of banking.51.Which of the following has been an important trend regarding consolidation andgeographicexpansion in banks?A.Increased bank branching activityB.The formation of more holding companies to purchase smaller banksC.Mergers among some of the largest banks in the industryD.Significant rise in the average size ofindividual banksE.All of the options are correct52.Included among leading structural trends in the U.S. banking industry in recent years are:A.thenumber of independently owned banks has declined.B.the average size of individual banking firms has increased.C.entry across state lines from neighboring states has increased.D.themergers among some of the largest banks in the industry.E.All of the options are correct.53.Smaller, locally focused commercial and savings banks that offer narrower but more personalizedmenu of financial services are known as:A.money-center banks.B.community banks.C.mutual funds.D.state banks.E.fringe banks.
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 9 preview image54.The banking services that include marketing new securities to raise funds for corporations andother institutions is referred to:A.comprehensive packaging.B.wrap-around accounts.C.investment banking.D.professional banking.E.None of the options are correct.55.A bank that wires funds for the purchase of a beach house in South Carolina for a customer inOklahoma is carrying out the __________ of banks.A.intermediation roleB.payment roleC.guarantor roleD.agency roleE.policy role56.Examples of imperfections in the financial system which allow banks to exist includewhich of thefollowing?A.Informational asymmetryB.Efficiency of marketsC.Divisibility of assetsD.Adequate liquidityE.All of the examples are of the imperfections that exist.57.A bank which manages the investmentportfolio and pays the bills of an elderly customer who isunable to do it for him or herself is carrying out the __________ of banks.A.intermediation roleB.payment roleC.guarantor roleD.agency roleE.policy role
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 10 preview image58.Which of the following is not a current trend in the banking industry?A.The number of banks is decliningB.The number of bank branches is decliningC.The number of bank services is increasingD.The number of bank competitors isincreasingE.Bank industry convergence59.Which of the following types of banks would most likely offer the largest number of financialservices virtually?A.A retail bankB.A community bankC.A commercial bankD.Auniversal bankE.An international bank60.The phenomenon of convergence refers to:A.financial service firms expanding into other product lines.B.firms reducing their product lines.C.bank merger activity.D.globalization in banking.E.technological innovation in banking.61.Bank equipment leasing activity involves:A.a bank leasing its office facilities instead of buying.B.abank buying equipment and then leasing the item to a customer.C.a customer buying equipment and then leasing it to a bank.D.a bank leasing computer equipment.E.None of the options are correct.62.Wholesale banks are those banksthat:A.sell at a discount relative to all commercial banks.B.only make loans to the wholesale industry.C.lend almost exclusively to farmers.D.serve corporations and government.E.have only retail customers.
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 11 preview image63.Jonathan Robbins has an account in a bank that does not have a physical branch. Jonathan doesall of his banking business over the Internet. What type of bank does Jonathan have his accountat?A.Virtual BankB.Mortgage BankC.Community BankD.Minority banksE.None of the options are correct.64.The Edmond National Bank serves only the City of Edmond, Oklahoma and concentrates onproviding the best possible service to this city. What type of bank is this most likely to be?A.Virtual BankB.Mortgage BankC.Community BankD.Bankers' banksE.None of the options are correct.65.The Charleston Southern Bank makes loans for families to purchase new and existing homes butdoes not take deposits. Whattype of bank is this most likely to be?A.Virtual BankB.Mortgage BankC.Community BankD.Merchant banksE.None of the options are correct.66.Which of the following is considered a fringe bank?A.Community BankB.Wholesale BankC.Merchant BankD.Payday LenderE.None of the options are correct.
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 12 preview image67.During the middle ages, banks encountered religious opposition because:A.loansto the poor often carried high interest rates.B.loans and deposits were primarily for wealthy customers.C.the Industrial Revolution demanded new methods of making payments and obtaining credit.D.savingsand wealth were lost due to war, theft, and expropriation by governments.E.All of the options are correct.68.Religious opposition decreased during the Renaissance because:A.loansto the poor often carried high interest rates.B.loans and deposits primarily consisted of wealthy customers.C.the Industrial Revolution demanded new methods of making payments and obtaining credit.D.savingsand wealth were lost due to war, theft, and expropriation by governments.E.All of the options are correct.69.Banks like the Medici Bank in Italy and the Hochstetter Bank in Germany were successfulbecause __________ and they responded well to these new needs.A.the poor needed loans at high interest ratesB.primarily wealthy customers needed loans and depositsC.the Industrial Revolution demanded new methods of making payments and obtaining creditD.people needed toprotect their savings and wealth from the governmentE.All of the options are correct.70.Early European banks were places for safekeeping of wealth because:A.loansto the poor often carried high interest rates.B.loans and deposits were primarily for wealthy customers.C.theindustrial revolution demanded new methods of making payments and obtaining credit.D.savings and wealth were lost due to war, theft, and expropriation by governments.E.All of the options are correct.
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 13 preview image71.The U.S. government wants toprevent money laundering by drug cartels. To promote this goal,they have asked banks to report any cash deposits greater than $10,000 to the government.Which of the following roles is the bank performing?A.The intermediation roleB.The payments roleC.The risk management roleD.The guarantor roleE.The policy role72.The Edmond Wine and Cheese shop wants to buy 30 cases of French Champagne on credit.Bank of America writes a letter of credit stating that the Edmond Wine andCheese shop is agood risk and that if they do not pay off the loan, Bank of America will. Which of the followingroles is the bank performing?A.The intermediation roleB.The payments roleC.The risk management roleD.Theguarantor roleE.The policy role73.Alexander Phuagoes to his local bank and gets an insurance policy that protects him against lossin case he is in a car accident. Which of the following roles is the bank performing?A.The intermediation roleB.The payments roleC.The risk management roleD.The guarantor roleE.The policy role74.Chris Jones gets a cashier's check from Wachovia Bank to make his down payment on a newhome. Which of the following roles is the bank performing?A.The intermediation roleB.Thepayments roleC.The risk management roleD.The guarantor roleE.The policy role
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 14 preview image75.The Bank, N.A. accepts deposits from thousands of individuals and lends that money to (amongothers) the Stillwater Body Shop to expand their workbays. Which of the following roles is thebank performing?A.The intermediation roleB.The payments roleC.The risk management roleD.The guarantor roleE.The policy role76.Major trends affecting the performance offinancial firms today include all of these except:A.greater product-line diversification.B.reduced branching.C.geographic diversification.D.convergence.E.increasing automation.77.The First National Bank of Lakelandmakes risky loans to businesses to expand and grow theirbusinesses while at the same time issuing low-risk securities to their depositors and other fundproviders. Which of the following services is this bank offering to their customers?A.Risky arbitrage servicesB.Liquidity servicesC.Delegated monitoring servicesD.Divisibility of money servicesE.Credit services78.Jonathan Wynn knows that if he wanted to purchase a Treasury Bill, the minimum amount hewould spend would beclose to $10,000. He also knows that he could deposit $1,000 in a moneymarket deposit account at a bank and earn about the same rate of interest. Jonathan does nothave $10,000 to invest in a Treasury Bill. If Jonathan puts his money in the bank, which servicethat a bank can provide, is he taking advantage of?A.Risky arbitrage servicesB.Liquidity servicesC.Delegated monitoring servicesD.Divisibility of money servicesE.Credit services
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 15 preview image79.Nick Rodrgets a loan from the First State Bank of Guthrie to purchase a new refrigerator for hiscondo. What service that a bank provides is he taking advantage of?A.Risky arbitrage servicesB.Liquidity servicesC.Delegated monitoring servicesD.Divisibility of money servicesE.Credit services80.Drew Davis goes to his local bank to get help developing a financial plan and making investmentdecisions. Which of the more recent services banks offer is Drew taking advantage of?A.Getting a consumer loanB.Getting financial adviceC.Managing cashD.Getting venture capital servicesE.Buying a retirement plan81.The BartholemewBakery receives a lot of payments in cash. They deposit it in their local bankwho invests the money in an interest bearing account until it is needed to pay bills. Which of thefinancial services banks offer, is the Bartholemew bakery taking advantage of?A.Getting a consumer loanB.Getting financial adviceC.Managing cashD.Getting venture capital servicesE.Buying a retirement plan82.MyWebCastis a new company that makes it easy for individuals to create streaming videos onthe Internet to share with friends and family for a small fee. MyWebCast wants to expand theirofferings of video streaming services but needs cash to be able to do this. The Second NationalBank of Oklahoma City, through a subsidiary, gives them the cash they need for an ownershipshare in the company. Which of the more recent services that banks offer is MyWebCast takingadvantage of?A.Getting a consumer loanB.Getting financial adviceC.Managing cashD.Getting venture capital servicesE.Buying a retirement plan
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Test Bank For Bank Management And Financial Services, 9th Edition - Page 16 preview image83.Chandriga Suppiahhas opened a Roth IRA with North Carolina State Bank and plans on makingregular contributions to this account until she retires. Which of the financial services is Chandrigataking advantage of?A.Getting a consumer loanB.Getting financial adviceC.Managing cashD.Getting venture capital servicesE.Buying a retirement plan84.The principal functions and services offered by many financial-service firms today include:A.lending and investing money.B.makingpayments on behalf of customers to facilitate their purchases of goods and services.C.managing and protecting customers' cash and other property.D.assistingcustomers in raising and investing funds profitably.E.All of the above.85.Which of the following is considered a depository financial institution?A.Mortgage companyB.Private pension fundsC.Savings and LoanassociationsD.Money market fundsE.Insurance company86.Which of the following is not a purpose of bank regulation?A.Guarantee minimal profitability of the banking systemB.Provide monetary stabilityC.Ensure safety andsoundness of banksD.Provide competitive financial systemE.Protect consumers from abuses of banks
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Bank Management And Financial Servi...

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