C1,2,3

Chapter 02 The Impact of Government Policy and Regulation on the
Financial-Services Industry
Student: ___________________________________
1. The _____________________ was created as part of the Glass-Steagall Act. In the beginning it
insured deposits up to $2,500.
2. The ________________________ is the law that states that a bank must get federal approval in order
to combine with another bank.
3. One tool that the Federal Reserve uses to control the money supply is ________________. The Federal
Reserve will buy and sell T-bills, bonds, notes, and selected federal agency securities when they are
using this tool of monetary policy.
4. The __________________________ was created in 1913 in response to a series of economic

depressions and failures. Its principal role is to serve as the lender of last resort and to stabilize the
financial markets.
5. The McFadden Act and the Douglas amendment which prevented banks from crossing state lines were
later repealed by the _______________________________.
6. The policy of FDIC to levy fixed insurance premiums regardless of the risk involved, led to a/an
_____________ problem among banks. The fixed premiums encouraged banks to accept greater risk.
7. In 1980, the __________________________ was passed, which lifted U.S government ceilings on
deposit interest rates in favor of free-market interest rates.
8. One tool that the Federal Reserve uses to control the money supply is ________________. The Federal
Reserve will change the interest rate they charge for short-term loans when they are using this tool of
monetary policy.
9. The first major federal banking law in the U.S. was the _________________________. This law was
passed during the Civil War and set up a system for chartering new national banks through the OCC.
10. The _________________________ was passed during the Great Depression. It separated
investment and commercial banks and created the FDIC.
11. The __________________________ brought bank holding companies under the jurisdiction of the
Federal Reserve.
12. The __________________________ allows adequately capitalized and managed bank holding
companies to acquire banks anywhere in the United States. However, no one bank can control more
than 30 percent of the deposits in any one state (unless the state waives this restriction) or more than 10
percent of the deposits across the country.
13. The ___________________________ allows well-managed and well-capitalized banking companies

with satisfactory CRA ratings to affiliate with insurance companies and securities firms either through a
financial holding company or through a subsidiary firm owned by a bank.
14. Customers of financial-service companies may _____________________ of having their private

information shared with a third party, such as a telemarketer. However, in order to do this, they must tell
the financial-services company in writing that they do not want their personal information shared with
outside parties.
15. The federal bank regulatory agency which examines the most banks is the _____________.
16. The _________________ requires selected financial institutions to report suspicious activity in
customer accounts to the Treasury Department.
17. The central bank of the new European Union is known as the ______________________.
18. The _____________________ Act prohibits banks and publicly owned firms from publishing false or
misleading financial performance information.
19. One of the main roles of the Federal Reserve today is ________________. They have three tools that
they use today to carry out this role: open market operations, the discount rate, and legal reserve
requirements.
20. The _____________________________ is the center of authority and decision making within the
Federal Reserve. It consists of seven members appointed by the president for terms not exceeding 14
years.
21. The main regulators of insurance companies are ____________________________.
22. Federal Credit Unions are regulated and examined by _________________________________.
23. The ___________________________________ makes it easier for victims of identity theft to file a
theft report with the Federal Trade Commission and allows the public to apply for a free credit report
once a year from the national credit bureaus.
24. The _____________________ makes it faster and less costly for banks to clear checks. It allows for
banks to electronically send check images instead of shipping paper checks across the country.
25. The _____________________________________ was created by the National Bank Act and is part of
the Treasury Department. It is the primary regulator of national banks.
26. The _________________________ proposes various regulations applying to the financial markets to
combat the recent credit crisis. This "bail-out" bill granted the US Treasury the means to purchase
troubled loans, allowed the FDIC to temporarily increase deposit insurance, and permitted the
government to inject additional capital into the banking system.
27. Federal Reserve Act authorized the creation of the Federal Deposit Insurance Corporation. True
False
28. In the United States, fixed fees charged for deposit insurance, regardless of how risky a bank is, led to
a problem known as moral hazard.
True False
29. Government-sponsored deposit insurance typically encourages individual depositors to monitor their
banks' behavior in accepting risk.
True False
30. The Federal Reserve changes reserve requirements frequently because the effect of these changes
is small.
True False
31. The Bank Merger Act and its amendments require that Bank Holding Companies be under the
jurisdiction of the Federal Reserve.
True False
32. National banks cannot merge without the prior approval of the Comptroller of the Currency. True
False
33. The Truth in Lending (or Consumer Credit Protection) Act was passed by the U.S. Congress to
outlaw discrimination in providing bank services to the public.
True False
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34. The federal law that states individuals and families cannot be denied a loan merely because of their
age, sex, race, national origin, or religious affiliation is known as the Competitive Equality in Banking
Act.
True False
35. Under the terms of the 1994 Riegle-Neal Interstate Banking and Branching Efficiency Act,
adequately capitalized and managed bank holding companies can acquire a bank anywhere inside
the United States.
True False
36. The 1994 Federal Interstate Banking bill does not limit the percentage of statewide or nationwide
deposits that an interstate banking firm is allowed to control.
True False
37. The term "regulatory dialectic" refers to the dual system of banking regulation in the United States and
selected other countries where both the federal or central government and local governments regulate
banks.
True False
38. The moral hazard problem of banks is caused by the fixed insurance premiums paid by banks which
make them accept greater risk.
True False
39. When the Federal Reserve buys T-bills through its open market operations, it causes the growth of
bank deposits and loans to decrease.
True False
40. When the Federal Reserve increases the discount rate, it generally causes other interest rates to
decrease.
True False
41. The National Bank Act (1863-64) created the Federal Reserve which acts as the lender of last resort.
True False
42. The Financial Institutions Reform, Recovery, and Enforcement Act (1989) allowed bank holding
companies to acquire nonbank depository institutions and, if desired, convert them into branch
offices.
True False
43. The Sarbanes-Oxley Act allows banks, insurance companies, and securities firms to form
Financial Holding Companies (FHCs).
True False
44. The Gramm-Leach-Bliley Act of 1999 essentially repeals the Glass-Steagall Act passed in the
1930s.
True False
45. Passed in 1977, the Equal Credit Opportunity Act prohibits banks from discriminating against
customers merely on the basis of the neighborhood in which they live.
True False
46. The tool used by the Federal Reserve System to influence the economy and behavior of banks is known
as moral hazard.
True False
47. One of the principal reasons for government regulation of financial firms is to protect the safety and
soundness of the financial system.
True False
48. Banks are regulated for which of the reasons listed below?
A. Banks are leading repositories of the public's savings.

B. Banks have the power to create money.
C. Banks provide businesses and individuals with loans that support consumption and investment
spending.
D. Banks assist governments in conducting economic policy, collecting taxes, and dispensing
government payments.
E. All of the options are correct.
49. An institutional arrangement in which federal and state authorities both have significant bank
regulatory powers is referred to as:
A. balance of power.
B. federalism.
C. dual banking system.
D. cooperative regulation.
E. coordinated control.
50. The law that set up the federal banking system and provided for the chartering of national banks was
the:
A. National Bank Act.

B. McFadden Act.
C. Glass-Steagall Act.
D. Bank Merger Act.
E. Federal Reserve Act.
51. The federal law that prohibited federally supervised commercial banks from offering investment
banking services on privately issued securities is known as:
A. the Glass-Steagall Act.

B. the Bank Merger Act.
C. the Depository Institutions Deregulation and Monetary Control Act.
D. the Federal Reserve Act.
E. None of the options are correct.
52. The Gramm-Leach-Bliley Act (Financial Services Modernization Act) calls for linking the government
supervision of the financial-services firm to the types of activities that the firm undertakes. For
example, the insurance portion of the firm would be regulated by state insurance commissions and the
banking portion of the firm would be regulated by banking regulators. This approach to government
supervision of financial services is known as:
A. consolidated regulation and supervision.

B. functional regulation.
C. government reregulation.
D. umbrella supervision and regulation.
53. The Federal Reserve policy tool under which the Fed attempts to bring psychological pressure to bear
on individuals and institutions to conform to the Fed's policies using letters, phone calls, and speeches is
known as:
A. margin requirement.
B. moral suasion.
C. discount window supervision.
D. conference and compromise.
54. The 1994 law that allowed bank holding companies to acquire banks anywhere in the U.S. is:
A. the Glass-Steagall Act.

B. the Federal Deposit Insurance Corporation Improvement Act.
C. the National Bank Act.
D. the Riegle-Neal Interstate Banking and Branching Efficiency Act.
55. Of the principal reasons for regulating banks, what was the primary purpose of the National
Banking Act (1863)?
A. Separation of commercial and investment banking

B. Separation of commercial banking and insurance activities
C. Chartering new banks and examining existing ones
D. Establishment of a network to clear and collect checks
E. Preventing banks from realizing monopoly powers
56. Of the principal reasons for regulating banks, what was the primary purpose of the Federal
Reserve Act of 1913?
A. Establishment of a network to clear and collect checks

B. Control of the money supply
C. Preventing banks from realizing monopoly powers
D. Ensuring an adequate and fair supply of loans
57. The law which lifted government deposit interest ceilings in favor of competitive interest rates is:
A. the National Bank Act.

B. the Glass-Steagall Act.
C. the Bank Merger Act.
D. the Depository Institutions Deregulation and Monetary Control Act.
58. The law that allows banks to affiliate with insurance companies and securities firms to form
financial services conglomerates is:
A. the National Bank Act.

B. the Glass-Steagall Act.
C. the Garn-St Germain Depository Institutions Act.
D. the Riegle-Neal Interstate Banking Act.
E. the Gramm-Leach-Bliley Act (Financial Services Modernization Act).
59. Of the principal reasons for regulating banks, what was the primary purpose of the Consumer
Credit Protection Act?
A. Establish a network to clear and collect checks

B. Control of the money supply
C. Prevent banks from realizing monopoly powers
D. Ensure that customers are aware of their rights and responsibilities under a loan agreement
60. Which of the following is an unresolved issue in the new century?
A. What should be done about the regulatory safety net set up to protect small depositors?
B. If financial institutions are allowed to take on more risk, how can taxpayers be protected from
paying the bill when more institutions fail?
C. Does functional regulation actually work?
D. Should regulators allow the mixing of banking and commerce?
E. All of these are unresolved issues
61. The law that made bank and nonbank depository institutions more alike in the services they could offer
and allowed banks and thrifts to more fully compete with other financial institutions is:
A. the National Banking Act.

B. the Federal Reserve Act.
E. the Gramm-Leach-Bliley Act (Financial Services Modernization Act).
62. The act that allowed bank holding companies to acquire nonbank depository institutions and
convert them to branches is:

B. the Garn-St Germain Act.
C. the Financial Institutions Reform, Recovery and Enforcement Act.
63. The equivalent of the Federal Reserve System in Europe is known as the:
A. European Union.
B. Bank of London.
C. European Council.
D. European Central Bank.
E. Swiss Bank Corporation.
64. As per the Gramm-Leach-Bliley Act, one of the ways through which a banking-insurance-
securities affiliation can take place is through:
A. a financial holding company.

B. the state insurance commissions.
C. the European Central Bank.
D. a financial service corporation.
E. a financial modernization organization.
65. The act which requires financial institutions to share information about customer identities with
government agencies is:
A. the Sarbanes-Oxley Act.

B. the National Banking Act.
D. the USA Patriot Act.
E. the Gramm-Leach-Bliley Act.
66. The 1977 act that prevents banks from "redlining" certain neighborhoods, refusing to serve those areas
is:

B. the Garn-St. Germain Act.
C. the Financial Institutions Reform, Recovery and Enforcement Act.
E. the Community Reinvestment Act.
67. Common minimum capital requirements on banks in leading industrialized nations that are based on the
riskiness of their assets is imposed by:

B. the Financial Institutions Reform, Recovery and Enforcement Act.
C. the International Banking Act.
D. the Basel Agreement.
68. The fastest growing financial crime in the U.S. is:
A. financial statement misrepresentation.

B. bank robberies.
C. individual privacy violations.
D. credit card fraud.
E. identity theft.
69. The oldest federal bank agency is the:
A. Office of the Comptroller of the Currency.

B. Federal Deposit Insurance Corporation.
C. Federal Reserve System.
D. state banking commission.
E. state insurance commission.
70. The federal agency that regulates the most banks is the:
A. Office of the Comptroller of the Currency.

B. Federal Deposit Insurance Corporation.
C. Federal Reserve System.
D. state banking commission.
E. state insurance commission.
71. Which federal banking act requires that financial service providers establish the identity of
customers opening new accounts?
A. the Sarbanes-Oxley Act

B. the USA Patriot Act
C. the Check 21 Act
D. the Fair and Accurate Credit Transactions Act
E. the Bankruptcy Abuse Prevention and Consumer Protection Act
72. Which federal banking act prohibits publishing false or misleading information about the financial
performance of a public company and requires top corporate officers to vouch for the accuracy of their
company's financial statements?
A. The Sarbanes-Oxley Act

B. The USA Patriot Act
C. The Check 21 Act
D. The Fair and Accurate Credit Transactions Act
E. The Bankruptcy Abuse Prevention and Consumer Protection Act
73. Which federal banking act reduces the need for banks to transport paper checks across the
country?

C. The Check 21 Act
74. Which federal banking act forces more individuals to repay at least part of what they owe and will push
higher-income borrowers into more costly forms of bankruptcy?

C. The Check 21 Act
75. Which federal banking act requires the Federal Trade Commission to make it easier for victims of
identity theft to file theft reports and requires credit bureaus to help victims resolve the problem?

C. The Check 21 Act
76. The _________ allows adequately capitalized bank holding companies to acquire banks in any state.
A. Riegle-Neal Interstate Banking and Branching Efficiency Act

B. Competitive Equality Banking Act
C. Financial Institutions Reform, Recovery and Enforcement Act
D. Federal Deposit Insurance Corporation Improvement Act
E. Depository Institutions Deregulation and Monetary Control Act
77. One of the earliest theories regarding the impact of regulation on banks was developed by
George Stigler. He contends that:
A. firms in regulated industries actually seek out regulations because they bring monopolistic rents.
B. regulations shelter firms from changes in demand and cost, lowering its risk.
C. regulations can increase consumer confidence which increases customer loyalty to regulated firms.
D. depository institutions should be regulated no differently than any other corporation with no
subsidies or special privileges.
78. Samuel Peltzman had a different view to George Stigler on the impact of regulation on banks. He
contends that:
79. There is an important debate raging today regarding whether banks should be regulated at all.
George Benston contends that:
E. None of the above options are correct.
80. The European Central Bank has the main goal of:
A. ensuring that commercial and investment banks are separated.
B. keeping unemployment low.
C. ensuring price stability.
D. ensuring an adequate and fair supply of loans.
E. All of the above options are correct.
81. Which of the following has become the principal tool of central bank monetary policy today?
A. Open market operations

B. Functional regulation
C. Umbrella supervision and regulation
D. Margin requirement
82. The Federal Reserve buys Treasury Bills in the open market. This will tend to:
A. decrease the price of treasury bills.
B. increase the available for use funds with banks and dealers involved in the transaction.
C. cause reserves held at the Federal Reserve to decrease.
D. cause a decrease in the growth of deposits and loans.
83. Which federal banking act extends deposit insurance coverage on qualified retirement accounts from
$100,000 to $250,000 and authorizes the FDIC to periodically increase deposit insurance coverage to
keep up with inflation?

B. The Gramm-Leach-Bliley Act
C. The Check 21 Act
E. The Federal Deposit Insurance Reform Act
84. The Financial Services Regulatory Relief Act of 2006:

A. adds selected new service powers to depository institutions.
B. loosens regulations on depository institutions.
C. grants the Federal Reserve authority to pay interest on depository institutions' legal reserves.
D. All of the options are correct.
85. The Emergency Economic Stabilization Act passed in 2008 during the global credit crisis, allowed for:
A. an emergency sale of "bad assets".
B. a temporary increase of FDIC deposit insurance to $250,000 for all deposits.
C. injections of capital by the government into banks and other qualified lenders.
D. a closer surveillance of the mortgage market participants, such as brokers and lenders.
86. As per the National Currency and Bank Acts, the comptroller of currency ensures that every
national bank is examined by a team of federal examiners at least:
A. twice in a year.
B. once in 3 months.
C. once every 12 to 18 months.
D. once every 9 to 12 months.
E. once in a month.
87. _____ requires corporations controlling two or more banks to register with the Federal Reserve Board
and seek approval for any new business acquisitions.
A. The Glass-Steagall Act

B. The Federal Deposit Insurance Corporation Improvement Act
C. The National Bank Act
D. The Riegle-Neal Interstate Banking and Branching Efficiency Act
E. The Bank Holding Company Act
88. _____ allows European and foreign banks greater freedom to cross national borders.
A. The European Monetary Union
B. The European Council
C. The Sarbanes-Oxley Act
D. The Garn-St Germain Depository Institutions Act
E. The Gramm-Leach-Bliley Act
89. Which of the following acts created a Financial Stability Oversight Council to dampen systemic risk?
A. The Dodd-Frank Regulatory Reform Act
B. The Sarbanes-Oxley Act
C. The Garn-St Germain Depository Institutions Act
D. The Gramm-Leach-Bliley Act
E. The Financial Institutions Reform, Recovery and Enforcement Act
90. Which of the following created the Truth in Savings Act?

A. The FDIC Improvement Act
B. The International Banking Act
C. The Sarbanes-Oxley Act
D. The Gramm-Leach-Bliley Act
E. The Financial Institutions Reform, Recovery and Enforcement Act
Chapter 1
An Overview of the Changing Financial-Services Sector
Fill in the Blank Questions
1. _______________________ is a traditional service provided by banks in which the banks store
the valuables of their customers and certify their true value.
2. The fact that financial institutions make loans based on confidential information is the
_______________________ theory of banking.
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 for a fee.
4. A(n) _______________________ is a traditional service which permits a depositor to write a

draft in payment for goods and services.
5. _______________________ is a service provided by banks where the bank lends money to

individuals for the purchase of durable and other goods.
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).
7. Companies such as Merrill Lynch and Sears which offered some but not all banking services in
the 1980s were called _______________________.
8. The loosening of government regulation and control of financial institutions is called
_______________________
9. ___________________________ is an alternative to lending in which the financial institution
purchases the equipment and rents it to its customers.
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.
11. The country with the most banks is _______________________.
12. According to Congress a ____________ is defined as any institution that can qualify for deposit
insurance administered by the FDIC.
13. A bank which spans regions, nations, and continents, offering the widest menu of financial
services is known as a __________bank.
14. _____________ refers to the movement of businesses across industry lines in order to broaden its
base.
15. Banks which serve primarily households and small firms are known as ____________ banks.
Answer: retail
16. Banks that sell deposits and make loans to businesses and individuals are known as ______banks.
17. Banks which underwrite issues of new securities for their corporate customers are known as
________ banks.
18. Banks which function under a federal charter through the Comptroller of the Currency in the
United States are known as ____________ banks.
19. 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 bank
this generally known as .
22. A(n) offers loans to commercial enterprises (such as appliance

dealers) or to individuals using funds borrowed in the open market or from other financial
institutions. Examples of this type of financial service provider include GMAC Financial
Services and Household Finance.
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 of assets including nontraditional investments in commodities, real estate, loans to
ailing companies and other risky assets.
25. When a bank agrees to handle the cash collections and disbursements for a company and invest
any temporary cash surpluses in interest bearing assets, they are providing services
to their customers.
True/False Questions
T F 26. Under U.S. federal law, an institution making only loans to households and offering
uninsured checkable deposits and savings deposits qualifies as a commercial bank.
T F 27. Nonbank banks can offer deposits to the public, but these deposits are not eligible for
insurance coverage by the FDIC.
T F 28. The etymological roots of the word "bank" trace this word back to an Italian term
referring to a "money-changer's table".
T F 29. According to the textbook, banks are those financial institutions that today offer the
widest range of financial services of any business firm in the economy.
T F 30. According to the delegated monitoring theory banks are able to attract borrowing
customers because they pledge confidentiality.
T F 31. Managing the financial affairs and property of individuals and business firms falls under
the type of banking service line known as cash management services.
T F 32. The role performed by banks in the economy in which they transform savings into credit
is known as the intermediation role.
T F 33. The role performed by banks in which they stand behind their customers when those
customers are unable to pay a debt obligation is known as the guarantor role.
T F 34.When banks serve as conduits for government policy this is referred to as their agency role.
T F 35. According to the textbook, high-volume banking is required to make efficient use of
automation and other technological innovations.
T F 36. The number of independently owned banks has risen in the United States over the last
decade.
T F 37. Money-center banks usually service local communities, towns, and cities, offering a
narrow menu of services to the public.
T F 38. A greater proportion of major corporations have deserted the banking system in recent
years to raise borrowed funds directly from the open market.
T F 39. The recent erosion of the banking market share relative to other financial institutions
means that banking is a dying industry.
T F 40. Lending institutions act as delegated monitors and can diversify and reduce their risk
exposure, resulting in increased safety for savers’ funds.
T F 41. Current theory suggests that banks exist because of imperfections in our financial system.
T F 42. Today U.S. banks account for approximately fifty percent of the largest banks in the
world.
T F 43. According to the textbook, traditional banking may be on the decline.
T F 44. Convergence refers to the fact that the number of bank mergers has increased in recent
years.
T F 45. Banks which offer virtually all financial services are known as universal banks.
T F 46. Life insurance companies, securities firms, and mortgage companies all compete with the
traditional bank.
Multiple Choice Questions
47. In the United States a commercial bank qualifies as a "bank" under federal law if it offers:
A) Consumer installment loans, CDs
B) Savings deposits, commercial loans
C) Checking accounts, commercial loans
D) Security investments, inventory loans to business customers
E) Commercial deposit accounts, consumer savings plans
48. E. F. Hutton, J.C. Penney, and Sears Roebuck are among leading firms that in the1980’s
organized competitors with banks that are known as:
A) Nonbank Banks
B) Discount Security Brokerage Companies
C) Money Market Funds
D) Finance Companies
E) Investment Banking Units
49. 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 above
50. Banks perform the indispensable task of:

A) Creating money without making loan.
B) Absorbing the excess liquidity created by other financial institutions
C) Intermediating between surplus-spending individuals or institutions and deficit-spending
individuals or institutions
D) Issuing risky deposits
51. 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
D) Market imperfection theory
E) The efficiency contribution of banking
52. Which of the following has been an important trend regarding consolidation and geographic
expansion in banks?
A) Increased bank branching activity
B) The formation of more holding companies to purchase smaller banks
C) Mergers among some of the largest banks in the industry
D) A and C above
E) All of the above.
53. Included among leading structural trends in the U.S. banking industry in recent years are:
A) The number 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) A and B only
E) All of the above.
54. Smaller, locally focused commercial and savings banks that offer narrower but more personalized
menu of financial services are known as:
A) Money center banks
B) Community banks
C) Mutual Funds
D) State banks
E) Fringe banks.
55. The banking services that includes executing buy and sell orders for security trading customers
and marketing new securities to raise funds for corporations and other institutions is referred to:
A) Comprehensive Packaging
B) Wrap-around Accounts
C) Investment Banking
D) Professional Banking
E) None of the above.
56. A bank that wires funds for the purchase of a beach house in South Carolina for a customer in
Oklahoma is carrying out the __________ of banks.
A) The intermediation role
B) The payment role
C) The guarantor role
D) The agency role
E) The policy role
57. Examples of imperfections in the financial system which allow banks to exist include which of
the following?
A) Informational asymmetry
B) Efficiency of markets
C) All individuals and businesses have full information about all investment opportunities.
D) All individuals and businesses have no difficulty meeting their liquidity needs on their own.
E) All of the above are examples of the imperfections that exist.
58. A bank which manages the investment portfolio and pays the bills of an elderly customer who is
unable to do it for him or herself is carrying out the __________ of banks.
B) The payment role
C) The guarantor role
D) The agency role
E) The policy role
59. Which of the following is a trend that has affected all banks today?
A) Increased isolation of banks in the U.S.
B) Decreased competition from other financial institutions
C) Decreased amount of services provided by modern banks
D) Rising funding costs
E) Increased regulations
60. Which of the following is not a current trend in the banking industry?
A) The number of banks is declining
B) The number of bank branches is declining
C) The number of bank services is increasing
D) The number of bank competitors is increasing
E) Bank industry convergence
61. Which of the following types of banks would most likely offer the largest number of financial
services?
A) A retail bank
B) A community bank
C) A commercial bank
D) A universal bank
E) An international bank
62. 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
63. Bank equipment leasing activity involves:

A) A bank leasing its office facilities instead of buying
B) A bank 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
64. Wholesale banks are those banks that:

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) Are large banks which serve corporations and government
E) Have only retail customers
65. Jonathan Robbins has an account in a bank that does not have a physical branch. Jonathan does
all of his banking business over the internet. What type of bank does Jonathan have his account
at?
A) Virtual Bank
B) Mortgage Bank
C) Community Bank
D) Affiliated Bank
66. The Edmond National Bank serves only the City of Edmond, Oklahoma and concentrates on
providing the best possible service to this city. What type of bank is this most likely to be?
A) Virtual Bank
B) Mortgage Bank
C) Community Bank
D) Affiliated Bank
67. The Charleston Southern Bank makes loans for families to purchase new and existing homes but
does not take deposits. What type of bank is this most likely to be?
A) Virtual Bank
B) Mortgage Bank
C) Community Bank
D) Affiliated Bank
68. Which of the following is considered a fringe bank?

A) Community Bank
B) Wholesale Bank
C) Merchant Bank
D) Payday Lender
69. During the middle ages, banks encountered religious opposition because:
A) Loans to 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) Savings and wealth were lost due to war, theft and expropriation by governments
E) All of the above
70. Religious opposition decreased during the Renaissance because:

E) All of the above
71. Banks like the Medici Bank in Italy and the Hochstetter Bank in Germany were successful
because and they responded well to
these new needs.
E) All of the above
72. Early European banks were places for safekeeping of wealth because:
C) The industrial revolution demanded new methods of making payments and obtaining credit
E) All of the above
73. The U.S. government wants to prevent 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?
B) The payment role
C) The risk management role
D) The guarantor role
E) The policy role
74. 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 and Cheese shop is a good
risk and that if they do not pay off the loan, Bank of America will. Which of the following roles
is the bank performing?
B) The payment role
E) The policy role
75. Alexander Phua goes to his local bank and gets an insurance policy that protects him against loss
in case he is in a car accident. Which of the following roles is the bank performing?
B) The payment role
E) The policy role
76. Chris Jones gets a cashier’s check from Wachovia Bank to make his down payment on a new
home. Which of the following roles is the bank performing?
B) The payment role
E) The policy role
77. The Bank, N.A. accepts deposits from thousands of individuals and lends that money to (among
others) the Stillwater Body Shop to expand their work bays. Which of the following roles is the
bank performing?
B) The payment role
E) The policy role
78. Major trends affecting the performance of financial firms today include all of these except:
A) Greater product-line diversification
B) Reduced branching
C) Geographic diversification
D) Convergence
E) Increasing automation
79. The First National Bank of Lakeland makes risky loans to business to expand and grow their
businesses while at the same time accepting funds into checking accounts that are insured by the
FDIC. Which of the following services is this bank offering to their customers?
A) Risky arbitrage services
B) Liquidity services
C) Ability of the bank to evaluate information
D) Divisibility of money services
E) Credit services
80. Jonathan Wynn knows that if he wanted to purchase a Treasury Bill, the minimum amount he
would spend would be close to $10,000. He also knows that he could deposit $1,000 in a money
market deposit account at a bank and earn about the same rate of interest. Jonathan does not have
$10,000 to invest in a Treasury Bill. If Jonathan puts his money in the bank, which service that a
bank can provide is he taking advantage of?
C) Ability of the bank to evaluate information
E) Credit services
81. Nick Rodr gets a loan from the First State Bank of Guthrie to purchase a new refrigerator for his
lOMoARcPSD|10468591
condo. What service that a bank provides is he taking advantage of?
C) Ability of a bank to evaluate information
E) Credit services
82. Drew Davis goes to his local bank to get help developing a financial plan and making investment
decisions. Which of the more recent services banks offer is Drew taking advantage of?
A) Getting a consumer loan
B) Getting financial advice
C) Managing cash
D) Getting venture capital services
E) Buying a retirement plan
83. The Bartholemew Bakery receives a lot of payments in cash. They deposit it in their local bank
who invests the money in an interest bearing account until it is needed to pay bills. Which of the
financial services banks offer is the Bartholemew bakery taking advantage of?
C) Managing cash
84. MyWebCast is a new company that makes it easy for individuals to create streaming videos on
the internet to share with friends and family for a small fee. MyWebCast wants to expand their
offerings of video streaming services but needs cash to be able to do this. The Second National
Bank of Oklahoma City, through a subsidiary, gives them the cash they need for an ownership
share in the company. Which of the more recent services that banks offer is MyWebCast taking
advantange of?
C) Managing cash
85. Chandriga Suppiah has opened a Roth IRA with North Carolina State Bank and plans on making
regular contributions to this account until she retires. Which of the financial services is
Chandriga taking advantage of?
C) Managing cash
86. Banks with less than ___________in assets are generally called community banks.
A) More than $1 billion
B) Less than $1 billion
C) More than $10 billion
D) Less than $1 trillion
E) More than $1 trillion
87. The principal functions and services offered by many financial-service firms today include:
A) Lending and investing money
B) Making payments of behalf of customers to facilitate their purchases of goods and services
C) Managing and protecting customers’ cash and other property
D) Assisting customers in raising and investing funds profitably
E) All of the above
88. Which of the following is considered a depository financial institution?

A) Mortgage company
B) Mutual fund
C) Savings and Loan associations
D) Federal Reserve
E) Insurance company
89. Which of the following is not a purpose of bank regulation:

A) Guarantee minimal profitability of the banking system
B) Provide monetary stability
C) Ensure safety and soundness of banks
D) Provide competitive financial system
E) Protect consumers from abuses by banks
Chapter 3
The Organization and Structure of Banking and the Financial-Services
Industry
Fill in the Blank Questions
1. A(n) ___________________ is a machine located at the merchant's place of business which allows
depositors to use their debit card to pay for purchases directly.
2. A(n) _____________________ is a bank which offers its full range of services from several
locations.
3. A(n) _____________________ is a bank which offers its full range of services from only one
location.
4. A(n)________________________ is a corporation chartered for the express purpose of holding the
stock of one or more banks.
5. Managers who value fringe benefits, plush offices and ample travel budgets over the pursuit of
maximum returns for stockholders are exhibiting signs of____________________
6. A(n) __________________________ can invest in corporate stock as sell as loan money to help
finance the start of new ventures or support the expansion of existing businesses.
7. A bank which operates exclusively over the internet is known as a___________ bank.
8. One new 21st century bank organizational structures is, _____________________ . This is a special
type of holding company that may offer the broadest range of financial services.
9. The key problem in a large money center bank is_________. Managers may be knowledgeable about
banking practices but may be less informed about products and services of subsidiary companies.
10. The Gramm-Leach-Bliley Act moved the U.S. banking industry closer to _________banking in
which banks may provide securities, insurance, and other financial products.
11. A bank that is not associated with a bank holding company is called a(n) ________ bank
12. ___________ is a view of how modern corporations operate which analyzes the relationship between
a firm’s owners and its managers
13. Many experts believe that the relationships that exist between managers, the board of directors and
stockholders, is more complicated in financial institutions.
14.____________________ is the idea that there will be a lower cost of production per unit as the firm gets
larger.
15. ________________________ is the idea that there will be lower cost of producing multiple services
using the same organization and resources.
16. Over the years, managers of banks and other financial institutions have evolved different
organizational forms to address changes in the industry. Indeed, these firms are organized to carry out
various roles in the most efficient way. This is referred to as _________________________.
True/False Questions
17. Bank size is not considered a significant factor in determining how banks are organized. (Quy mô ngân
hàng không được coi là một yếu tố quan trọng trong việc xác định hình thức tổ chức ngân hàng)
18. Nearly three quarters of all U.S. banks exceed $100 million in asset size apiece. (Gần ¾ trong số các
ngân hàng ở Mỹ có quy mô tài sản vượt quá 100 triệu đô mỗi ngân hàng)
19. Nearly all U.S. banks with federal or state charters have their deposits insured by the Federal Deposit
Insurance Corporation.
20. State-chartered banks in the United States represent about a quarter oall U.S.-chartered banks, while
national banks account for approximately three quarters oall U.S. chartered banks.
21. The majority oall U.S. banks are members othe Federal Reserve System.
22. A banking corporation chartered by either federal or state governments that operates only one full-service
office is called a unit bank.
23. Over haloall U.S. states today limit branching activity.
24. The average U.S. bank is larger in size (in terms onumber obranch offices) than the average Canadian
bank.
25. Despite the rapid growth oautomation in U.S. banking, there are more full-service branch banking offices
than automated teller machines across the whole U.S.
26. In the United States there are more one-bank holding companies than multi-bank holding companies.
27. Bank holding companies hold more than 90 percent othe industry’s assets in the United States.
28. Research evidence suggests that banks taken over by interstate banking organizations have generally
increased their market shares over their competitors within the same state and generally are more profitable
than their competitors.
29. The concentration obank deposits at the local level (that is in urban communities and rural counties) has
displayed only moderate changes in recent years.
30. There is evidence that branch banks charge higher fees for some banking services than do unit banks.
(Có bằng chứng cho thấy các ngân hàng chi nhánh tính phí cao hơn đối với một số dịch vụ ngân hàng so với
các ngân hàng đơn vị)
31. Branch banks tend to offer a wider menu oservices than unit banks. (Các ngân hàng chi nhánh có xu
hướng cung cấp nhiều loại hình dịch vụ hơn so với các ngân hàng đơn vị)
32. Recent research suggests that branch banks tend to be more profitable than either unit or holding
company banks, while interstate banks tend to be the most profitable oall. (Nghiên cứu gần đây cho thấy
rằng các ngân hàng chi nhánh có xu hướng sinh lãi nhiều hơn so với các ngân hàng đơn vị hoặc ngân hàng
công ty mẹ, trong khi các ngân hàng liên tiểu bang có xu hướng sinh lãi nhiều nhất)
33. Less than 10 percent othe largest banks in the U.S. control almost 90 percent othe industry assets. (Ít hơn
10% các ngân hàng lớn nhất ở Mỹ kiểm soát gần 90% tài sản của ngành)
34. Agency theory suggests that bank management will always pursue the goal omaximizing the return othe
bank's shareholders. (Học thuyết đại diện cho rằng việc quản lý ngân hàng sẽ luôn theo đuổi mục tiêu tối đa
hóa lợi nhuận của các cổ đông của ngân hàng)
35. Recent research suggests that the relationship between bank size and the cost oproduction per unit is
roughly U shaped.
36. Bank holding companies that want to achieve the goal orisk reduction in earnings risk through interstate
banking can achieve the same level orisk reduction by entering any othe fifty states. (Các công ty ngân hàng
mẹ muốn đạt được mục tiêu giảm thiểu rủi ro trong rủi ro thu nhập thông qua ngân hàng liên tiểu bang có
thể đạt được mức giảm rủi ro tương tự bằng cách có mặt ở một bang bất kỳ trong số 50 bang)
37. Bank holding companies are allowed to own nonbank businesses as long as those businesses offer
services closely related to banking. (Các công ty ngân hàng mẹ được phép sở hữu các doanh nghiệp phi
ngân hàng miễn là những doanh nghiệp đó cung cấp các dịch vụ liên quan chặt chẽ đến ngành ngân hàng)
38. Banks tend to have a higher proportion ooutside directors than a typical manufacturing firm. (Các ngân
hàng có xu hướng có tỷ lệ thành viên hội đồng quản trị độc lập cao hơn so với một công ty sản xuất điển
hình)
39. Banks which operate entirely on the web are known as invisible banks. (Các ngân hàng hoạt động hoàn
toàn trên web được gọi là ngân hàng vô hình)
40. Banks acquired by holding companies are referred to as affiliated banks. (Các ngân hàng được mua lại
bởi các công ty mẹ được gọi là ngân hàng trực thuộc)
41. Bank organizational structure has become more complex in recent years. (Cơ cấu tổ chức ngân hàng đã
trở nên phức tạp hơn trong những năm gần đây)
42. There are only a very small number ounit banks in the U.S. today.
43. Traditional brick-and-mortar bank branch offices are on the decline in the U.S. today. (Ngày nay, các văn
phòng chi nhánh ngân hàng truyền thống đang suy giảm ở Mỹ)
44. Community banks are usually smaller banks that are devoted principally to the markets for smaller,
locally based deposits and loans.
45. The question owhether financial firms operate as efficiently as possible requires researchers to look into
the issue ox-efficiency. The concept requires an assessment othe financial firm’s operating costs in relation
to its cost-efficient frontier.
Multiple Choice Questions
46..In banking, organizational form follows __________ because banks usually

are organized in such a way as to carry out the tasks and supply the services
demanded of them. The term that correctly fills in the blank in the sentence
above is: (Trong ngân hàng, hình thức tổ chức tuân theo vì các
ngân hàng thường được tổ chức theo cách thức thực hiện các nhiệm vụ và cung
cấp các dịch vụ. Từ điền đúng vào chỗ trống trên là)
A) Bank size
B) Management's decision
C) Function
D) Regulation
E) Location
47.Which one of the following is charged with setting policy and overseeing a bank's
performance? (Bộ phận nào sau đây chịu trách nhiệm thiết lập chính sách và giám
sát hoạt động của ngân hàng)
A) Stockholders
B) Board of directors
C) Regulators
D) Depositors
48.The largest banks possess some potential advantages over small and medium-size
banks, according to the textbook. What specific advantage of the largest banks over
small and medium-sized banks is not mentioned in the text? (Theo giáo trình, các
ngân hàng lớn nhất sở hữu một số lợi thế tiềm năng hơn so với các ngân hàng vừa và
nhỏ. Lợi thế cụ thể nào của các ngân hàng lớn nhất so với các ngân hàng vừa và nhỏ
mà không được đề cập trong văn bản)
A) Greater diversification geographically and by product line
B) Availability of financial capital at lower cost
C) Greater professional expertise to allocate capital to the most promising products
and services
D) Better positioned to take advantage of the opportunities afforded by interstate
banking.
E) All of the above were mentioned in the text as advantages typically
possessed by the largest banks.
49.Before any financial services can be offered to anyone a bank in the United States
must have a: (Trước khi có thể cung cấp bất kì dịch vụ tài chính nào cho bất kì ai, một
ngân hàng ở Mỹ phải có)
A) Certificate of deposit insurance
B) Charter of incorporation
C) List of established customers
D) New building constructed to be the bank's permanent home
50.In the United States there are close to __________ commercial banks in
operation. Which number shown below is closest to the actual total number
of U.S. banks operating in the U.S.? (Ở Mỹ có gần NHTM đang hoạt
động. Con số nào dưới đây gần nhất với tổng số các ngân hàng đang hoạt động
trên thực tế tại Mỹ)
A) 20,500
B) 13,500
C) 11,500
D) 9,000
E) 7,500
51.One of the few states that has opted out of interstate banking is: (Một trong số ít các
tiểu bang đã chọn không tham gia ngân hàng liên tiểu bang là)
A) New York
B) Ohio
C) Texas
D) Montana
52.The concentration of U.S. bank deposits in the hands of the largest banks has
_________ during the most recent period. (Việc tập trung tiền gửi ở các
ngân hàng Mỹ vào tay các ngân hàng lớn nhất đã trong giai đoạn
gần đây)
A) Declined
B) Increased
C) Remained essentially unchanged
D) Exhibited large fluctuations in both directions
E) None of above.
53. Bank holding company organizations have several advantages over other
types of banking organizations. Among the advantages mentioned in this chapter is: (Các
tổ chức công ty chủ quản ngân hàng có một số lợi thế so với các loại hình tổ chức ngân
hàng khác. Trong số những lợi thế được đề cập trong chương này là)
A) Greater ease of access to capital markets
B) Tax advantage
C) Product-line diversification
D) All of the above.
54. A company which owns the stock of three different banks is known as a(n):
(Một công ty sở hữu cổ phần của ba ngân hàng khác nhau được gọi là)
A) Unit Bank
B) Interstate Bank
C) One Bank Holding Company
D) Multi Bank Holding Company
55. Which of the following is considered an advantage of branch banking?

(Đâu được xem là lợi thế của chi nhánh ngân hàng)
A) Increased availability and convenience of services
B) Decreased chance of failure
C) Reduced transaction costs
D) B and C above
E) All of the above
56. The types of nonbank businesses a bank holding company can own include
which of the following? (Các loại hình kinh doanh phi ngân hàng mà một công ty chủ
quản ngân hàng có thể sở hữu bao gồm)
A) Retail Computer Store
B) Security Brokerage Firm
C) Retail Grocery Store
D) Wholesale Electronic Distribution Company
E) All of the above
57. A bank which offers its full range of services from only one office is known as a: (Một
ngân hàng cung cấp đầy đủ các dịch vụ chỉ từ một văn phòng được gọi là)
A) Unit Bank
B) Branch Bank
C) Correspondent Bank
D) Bank Holding Company
58. Why did so many states and the federal government finally enact interstate banking
laws? (Tại sao rất nhiều tiểu bang và chính quyền liên bang cuối cùng đã ban hành luật
ngân hàng liên tiểu bang)
A) The need for new capital in order to revive struggling economies
B) The expansion of services by nonbank financial institutions
C) Competition from neighboring states that already liberalized their laws
D) Advances in technology which allowed banks to service customers in broader
geographic areas
E) All of the above are reasons for the passage of interstate banking laws
59. What is a bank holding company? (Thế nào là một công ty chủ quản ngân hàng)
A) It is a bank that offers all of its services out of one office
B) It is a bank that offers all its services out of several offices
C) It is a corporation formed to hold the stock of one or more banks
D) It is a merchant bank
60. Which of the following is a type of service a bank holding company is not
allowed to own? (Loại hình dịch vụ nào sau đây mà một công ty chủ quản ngân hàng
không được phép sở hữu)
A) Merchant banking company
B) Savings and loan association
C) Retail electronics equipment sales company
D) Security brokerage firm
E) Insurance agency
61. In the last decade, the number of banks has __________ and the number of
branches has _________. (Trong thế kỷ trước, số lượng ngân hàng và số
lượng các chi nhánh )
A) Declined; Increased
B) Grown; Increased
C) Grown; Decreased
D) Declined; Decreased
E) Stabilized; Stabilized
62. Websites known as electronic branches offer all of the following except: (Các trang
web được gọi là các chi nhánh điện tử cung cấp tất cả những dịch vụ sau ngoại trừ)
A) Internet banking services
B) ATMs
C) Point of sales terminals
D) Computer and phone services connecting customers
E) Traveler's checks
63.Relative to manufacturing firms, banks tend to have a (the) ___________
number of board members. (So với các công ty sản xuất, các ngân hàng có
xu hướng có số lượng thành viên hội đồng quản trị )
A) Same
B) Larger
C) Smaller
D) Unknown
64.The percentage of unit banks in the U.S. today is approximately:

A) 10%
B) 30%
C) 50%
D) 75%
E) 100%
65.The ‘typical’ community bank has: (Ngân hàng cộng đồng điển hình có)
A) $300 million in assets and is located in a smaller city in the Midwest.
B) $25 billion in assets and is located in a large city in the East
C) $100 million in assets and is located in a large city the South
D) $10 billion in assets and is located in a small city in the West
66.The ‘typical’ money center bank has: (Ngân hàng trung tâm tiền tệ điển hình có)
A) $250 million in assets and is located in a smaller city in the Midwest
B) $25 billion in assets and is located in a large city in the East
C) $100 million in assets and is located in a large city in the South
D) $10 billion in assets and is located in a small city in the West
67. The majority of banks today are: (Phần lớn các ngân hàng hiện nay là)
A) Federally chartered
B) Uninsured
C) State Chartered
D) National Banks
E) All of the above
68. ‘Member’ banks are: (Các ngân hàng thành viên là)
A) Members of the FDIC
B) National Banks
C) Unit Banks
D) Members of the Federal Reserve
E) All of the above
69. and banks tend to be

larger and hold more of the public’s deposits. (Ngân hàng
và có xu hướng mở rộng và nắm giữ nhiều tiền gửi
của công chúng hơn)
A) National and Member
B) State and Nonmember
C) National and Uninsured
D) State and Insured
70. Which of the following is a reason for the rapid growth in branch banks? (Điều nào
sau đây là lí do cho sự phát triển nhanh chóng của các chi nhánh ngân hàng)
A) Exodus of population from cities to suburban areas (sự di cư của người dân từ
các thành phố về các khu vực ngoại thành)
B) Bank convergence
C) Business failures
D) Decreased costs of brick and mortar
E) All of the above
71. Under the Bank Holding Company Act control of a bank is assumed to exist only
if: (Theo Đạo luật công ty chủ quản ngân hàng, quyền kiểm soát ngân hàng chỉ được coi
là tồn tại nếu)
A) The bank holding company acquires 100% of the bank’s stock
B)
C) The
The bank
bank holding
holding company
company acquires
acquires 50%
25% or
or more
more of
thethe bank’s
bank’s stock
stock
D) The bank holding company acquires three banks
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72. When a bank holding company acquires a nonbank business it must be

approved by: (Khi một công ty chủ quản ngân hàng mua tại một tổ chức phi
ngân hàng, nó phải được sự cho phép của)
A) The FDIC
B)
C) The
The Comptroller of the Currency
Federal Reserve
D) The President of the U.S.
E) All of the above
73. Many financial experts believe that the customers most likely to
be damaged by decreased competition include: (Nhiều chuyên gia tài chính tin
rằng những khách hàng có khả năng bị thiệt hại do cạnh tranh giảm bao gồm)
A) Large corporations in large cities
B) Households and business in smaller cities and towns
C) Households that earn more than a billion dollars a year
D) Students away at college
74. According to Levonian and Rose in order to achieve some
reduction in earnings risk, interstate banks must expand into at least: (Theo
Levonian và Rose, để giảm thiểu rủi ro thu nhập, các ngân hàng liên tiểu
bang phải mở rộng sang ít nhất là)
A) 2 states
B) 4 states
C) 6 states
D) 10 states
E) 25 states
75. The major competitors of banks have: (Những đối thủ cạnh tranh
chính của các ngân hàng có)
A) Fewer but much larger service providers
B) Fewer but smaller service providers
C) More but smaller service providers
D) More but larger service providers
76. Of the following countries in Europe, which has the largest number of
banks? (Trong các quốc gia ở châu Âu sau đây, quốc gia nào có nhiều ngân
hàng nhất)
A) Belgium
B) France
C) Germany
D) Great Britain
77. Which country’s banks were owned by the state until the 1990’s?
(Ngân hàng của quốc gia nào thuộc sở hữu của nhà nước cho đến những năm
1990)
A) Belgium
B) France
C) Germany
D) Italy
78. When financial service providers offer a range of services
including banking, insurance and securities services it is known as: (Khi các
nhà cung cấp dịch vụ tài chính cung cấp một loạt các dịch vụ bao gồm ngân
hàng, bảo hiểm và chứng khoán, nó được gọi là)
A)
B) Consolidation
Convergence
C) Economies of scale
D) E-Efficiencies
79. The gradual evolution of markets and institutions such that geographic
boundaries do not restrict financial transactions is known as: (Sự phát triển
dần dần của các thị trường và thể chế sao cho ranh giới địa lý không hạn chế
các giao dịch tài chính được gọi là)
A) Deregulation
B) Integration
C) Re-regulation
D) Globalization
E) Moral suasion
80. Banks with _______ in assets are generally called community banks.
(Những ngân hàng có lượng tài sản thường được gọi là các ngân hàng cộng
đồng)
A) More than $1 billion
B) Less than $1 billion
C) More than $5 million
D) Less than $1 trillion
E) More than $1
trillion
81. Nonbank financial firms that supply insurance coverage to

customers borrowing money to guarantee repayment of a loan are referred to as:
(Các công ty tài chính phi ngân hàng cung cấp bảo hiểm cho khách hàng vay
tiền để đảm bảo hoàn trả khoản vay được gọi là)
A) Merchant Bankers
B) Factoring Companies
C) Savings Associations
D) Investment Bankers
E) Credit Insurance Underwriters
82. A financial holding company (FHC), defined as a special type of

holding company that may offer the broadest range of financial services such as
securities and insurance activities, were allowed under which act? (Một công ty
cổ phần tài chính, được định nghĩa là một loại hình công ty cổ phần đặc biệt có
thể cung cấp nhiều loại dịch vụ tài chính nhất như hoạt động chứng khoán và
bảo hiểm, được cho phép hoạt động theo đạo luật nào)
A) Riegle-Neal Interstate Banking and Branching Efficiency Act

B) The Competitive Equality in Banking Act
C) The Basel Agreement
D) The FDIC Improvement Act
E) The Gramm-Leach-Bliley Financial Services Modernization

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Chapter 02 The Impact of Government Policy and Regulation on the

4. The __________________________ was created in 1913 in response to a series of economic

13. The ___________________________ allows well-managed and well-capitalized banking companies

14. Customers of financial-service companies may _____________________ of having their private

21. The main regulators of insurance companies are ____________________________.

22. Federal Credit Unions are regulated and examined by _________________________________.

A. Banks are leading repositories of the public's savings.

A. National Bank Act.

A. the Glass-Steagall Act.

A. consolidated regulation and supervision.

A. the Glass-Steagall Act.

A. Separation of commercial and investment banking

A. Establishment of a network to clear and collect checks

A. the National Bank Act.

A. the National Bank Act.

A. Establish a network to clear and collect checks

60. Which of the following is an unresolved issue in the new century?

A. the National Banking Act.

A. the National Banking Act.

A. a financial holding company.

A. the Sarbanes-Oxley Act.

A. the National Banking Act.

A. the National Banking Act.

68. The fastest growing financial crime in the U.S. is:

A. financial statement misrepresentation.

A. Office of the Comptroller of the Currency.

A. Office of the Comptroller of the Currency.

A. the Sarbanes-Oxley Act

A. The Sarbanes-Oxley Act

A. The Sarbanes-Oxley Act

A. The Sarbanes-Oxley Act

A. The Sarbanes-Oxley Act

A. Riegle-Neal Interstate Banking and Branching Efficiency Act

A. Open market operations

A. The Sarbanes-Oxley Act

84. The Financial Services Regulatory Relief Act of 2006:

A. The Glass-Steagall Act

90. Which of the following created the Truth in Savings Act?

4. A(n) _______________________ is a traditional service which permits a depositor to write a

5. _______________________ is a service provided by banks where the bank lends money to

10. The___________________________ is a landmark act which allows financial service providers

11. The country with the most banks is _______________________.

22. A(n) offers loans to commercial enterprises (such as appliance

24. A(n) sells shares mainly to upscale investors in a broad

T F 43. According to the textbook, traditional banking may be on the decline.

50. Banks perform the indispensable task of:

62. The phenomenon of convergence refers to:

63. Bank equipment leasing activity involves:

64. Wholesale banks are those banks that:

68. Which of the following is considered a fringe bank?

70. Religious opposition decreased during the Renaissance because:

88. Which of the following is considered a depository financial institution?

89. Which of the following is not a purpose of bank regulation:

Multiple Choice Questions

46..In banking, organizational form follows __________ because banks usually

55. Which of the following is considered an advantage of branch banking?

64.The percentage of unit banks in the U.S. today is approximately:

69. and banks tend to be

72. When a bank holding company acquires a nonbank business it must be

81. Nonbank financial firms that supply insurance coverage to