Banking and Finance, 2026 – Lecture Notes and Study
Material
In the United States, a commercial bank qualifies as a "bank" under federal law if it offers:
A.
consumer installment loans, CDs.
B.
trust services, commercial loans.
C.
checking accounts, commercial loans.
D.
security investments, inventory loans to business customers.
E.
commercial deposit accounts, consumer savings plans. - ANS✔✔ C
J.C. Penney, and Sears provided are among leading firms that in the 1980s organized
competitors with banks that are known as:
A.
nonbank financial-service institutions.
B.
discount security companies.
,C.
savings institutions.
D.
credit unions.
E.
commercial banks. - ANS✔✔ A
A study of history shows that one of the first services offered by banks was:
A.
equipment leasing.
B.
currency exchange.
C.
security brokerage and underwriting.
D.
sale of real estate.
E.
None of the options are correct - ANS✔✔ B
,Banks perform the indispensable task of:
A.
creating money without making loans.
B.
absorbing the excess liquidity created by other financial institutions.
C.
intermediating between surplus-spending parties and deficit-spending parties.
D.
issuing risky deposits.
E.
None of the options are correct - ANS✔✔ C
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. - ANS✔✔ A
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.
Significant rise in the average size of individual banks
E.
All of the options are correct - ANS✔✔ E
Included among leading structural trends in the U.S. banking industry in recent years are:
A.
Material
In the United States, a commercial bank qualifies as a "bank" under federal law if it offers:
A.
consumer installment loans, CDs.
B.
trust services, commercial loans.
C.
checking accounts, commercial loans.
D.
security investments, inventory loans to business customers.
E.
commercial deposit accounts, consumer savings plans. - ANS✔✔ C
J.C. Penney, and Sears provided are among leading firms that in the 1980s organized
competitors with banks that are known as:
A.
nonbank financial-service institutions.
B.
discount security companies.
,C.
savings institutions.
D.
credit unions.
E.
commercial banks. - ANS✔✔ A
A study of history shows that one of the first services offered by banks was:
A.
equipment leasing.
B.
currency exchange.
C.
security brokerage and underwriting.
D.
sale of real estate.
E.
None of the options are correct - ANS✔✔ B
,Banks perform the indispensable task of:
A.
creating money without making loans.
B.
absorbing the excess liquidity created by other financial institutions.
C.
intermediating between surplus-spending parties and deficit-spending parties.
D.
issuing risky deposits.
E.
None of the options are correct - ANS✔✔ C
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. - ANS✔✔ A
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.
Significant rise in the average size of individual banks
E.
All of the options are correct - ANS✔✔ E
Included among leading structural trends in the U.S. banking industry in recent years are:
A.
