Test Bank Chapter 9 Banking and Management of Financial Institutions
Which of the following are reported as liabilities on B) checkable deposits
a bank's balance sheet?
A) reserves
B) checkable deposits
C) consumer loans
D) deposits with other banks
Which of the following are reported as liabilities on A) discount loans
a bank's balance sheet?
A) discount loans
B) reserves
C) U.S. Treasury securities
D) real estate loans
The share of checkable deposits in total bank C) shrunk over time.
liabilities has
A) expanded moderately over time.
B) expanded dramatically over time.
C) shrunk over time.
D) remained virtually unchanged since 1960.
Which of the following statements is FALSE? B) Checkable deposits are the primary source of bank funds.
A) Checkable deposits are usually the lowest cost
source of bank funds.
B) Checkable deposits are the primary source of
bank funds.
C) Checkable deposits are payable on demand.
D) Checkable deposits include NOW accounts.
In recent years the interest paid on checkable and C) 25 percent; 50 percent
nontransaction deposits has accounted for around
________ of total bank operating expenses, while
the costs involved in servicing accounts have been
approximately ________ of operating expenses.
A) 45 percent; 55 percent
B) 55 percent; 4 percent
C) 25 percent; 50 percent
D) 50 percent; 30 percent
, Test Bank Chapter 9 Banking and Management of Financial Institutions
Which of the following statements are TRUE? A) Checkable deposits are payable on demand.
A) Checkable deposits are payable on demand.
B) Checkable deposits do not include NOW
accounts.
C) Checkable deposits are the primary source of
bank funds.
D) Checkable deposits are assets for the bank.
Because checking accounts are ________ liquid for D) more; lower
the depositor than savings accounts, they earn
________ interest rates.
A) less; higher
B) less; lower
C) more; higher
D) more; lower
Which of the following are transaction deposits? C) checkable deposits
A) savings accounts
B) small-denomination time deposits
C) checkable deposits
D) certificates of deposit
All of the following are nontransaction deposits C) checkable deposits.
EXCEPT
A) savings accounts.
B) small-denomination time deposits.
C) checkable deposits.
D) certificates of deposit.
Large-denomination CDs are ________, so that like a C) negotiable; secondary
bond they can be resold in a ________ market
before they mature.
A) nonnegotiable; secondary
B) nonnegotiable; primary
C) negotiable; secondary
D) negotiable; primary
, Test Bank Chapter 9 Banking and Management of Financial Institutions
Because ________ are less liquid for the depositor C) savings accounts; checkable deposits
than ________, they earn higher interest rates.
A) money market deposit accounts; time deposits
B) checkable deposits; savings accounts
C) savings accounts; checkable deposits
D) savings accounts; time deposits
Because ________ are less liquid for the depositor D) time deposits; savings accounts
than ________, they earn higher interest rates.
A) savings accounts; time deposits
B) money market deposit accounts; time deposits
C) money market deposit accounts; savings
accounts
D) time deposits; savings accounts
Banks acquire the funds that they use to purchase B) savings accounts.
income-earning assets from such sources as
A) cash items in the process of collection.
B) savings accounts.
C) reserves.
D) deposits at other banks.
Bank loans from the Federal Reserve are called B) discount loans; source
________ and represent a ________ of funds.
A) discount loans; use
B) discount loans; source
C) fed funds; use
D) fed funds; source
Which of the following is NOT a source of C) transaction deposits
borrowings for a bank?
A) federal funds
B) Eurodollars
C) transaction deposits
D) discount loans
Bank capital is equal to ________ minus ________. A) total assets; total liabilities
A) total assets; total liabilities
B) total liabilities; total assets
C) total assets; total reserves
D) total liabilities; total borrowings
Bank ________ is/are listed on the liability side of B) capital
the bank's balance sheet.
A) reserves
B) capital
C) securities
D) cash items
Which of the following are reported as liabilities on B) checkable deposits
a bank's balance sheet?
A) reserves
B) checkable deposits
C) consumer loans
D) deposits with other banks
Which of the following are reported as liabilities on A) discount loans
a bank's balance sheet?
A) discount loans
B) reserves
C) U.S. Treasury securities
D) real estate loans
The share of checkable deposits in total bank C) shrunk over time.
liabilities has
A) expanded moderately over time.
B) expanded dramatically over time.
C) shrunk over time.
D) remained virtually unchanged since 1960.
Which of the following statements is FALSE? B) Checkable deposits are the primary source of bank funds.
A) Checkable deposits are usually the lowest cost
source of bank funds.
B) Checkable deposits are the primary source of
bank funds.
C) Checkable deposits are payable on demand.
D) Checkable deposits include NOW accounts.
In recent years the interest paid on checkable and C) 25 percent; 50 percent
nontransaction deposits has accounted for around
________ of total bank operating expenses, while
the costs involved in servicing accounts have been
approximately ________ of operating expenses.
A) 45 percent; 55 percent
B) 55 percent; 4 percent
C) 25 percent; 50 percent
D) 50 percent; 30 percent
, Test Bank Chapter 9 Banking and Management of Financial Institutions
Which of the following statements are TRUE? A) Checkable deposits are payable on demand.
A) Checkable deposits are payable on demand.
B) Checkable deposits do not include NOW
accounts.
C) Checkable deposits are the primary source of
bank funds.
D) Checkable deposits are assets for the bank.
Because checking accounts are ________ liquid for D) more; lower
the depositor than savings accounts, they earn
________ interest rates.
A) less; higher
B) less; lower
C) more; higher
D) more; lower
Which of the following are transaction deposits? C) checkable deposits
A) savings accounts
B) small-denomination time deposits
C) checkable deposits
D) certificates of deposit
All of the following are nontransaction deposits C) checkable deposits.
EXCEPT
A) savings accounts.
B) small-denomination time deposits.
C) checkable deposits.
D) certificates of deposit.
Large-denomination CDs are ________, so that like a C) negotiable; secondary
bond they can be resold in a ________ market
before they mature.
A) nonnegotiable; secondary
B) nonnegotiable; primary
C) negotiable; secondary
D) negotiable; primary
, Test Bank Chapter 9 Banking and Management of Financial Institutions
Because ________ are less liquid for the depositor C) savings accounts; checkable deposits
than ________, they earn higher interest rates.
A) money market deposit accounts; time deposits
B) checkable deposits; savings accounts
C) savings accounts; checkable deposits
D) savings accounts; time deposits
Because ________ are less liquid for the depositor D) time deposits; savings accounts
than ________, they earn higher interest rates.
A) savings accounts; time deposits
B) money market deposit accounts; time deposits
C) money market deposit accounts; savings
accounts
D) time deposits; savings accounts
Banks acquire the funds that they use to purchase B) savings accounts.
income-earning assets from such sources as
A) cash items in the process of collection.
B) savings accounts.
C) reserves.
D) deposits at other banks.
Bank loans from the Federal Reserve are called B) discount loans; source
________ and represent a ________ of funds.
A) discount loans; use
B) discount loans; source
C) fed funds; use
D) fed funds; source
Which of the following is NOT a source of C) transaction deposits
borrowings for a bank?
A) federal funds
B) Eurodollars
C) transaction deposits
D) discount loans
Bank capital is equal to ________ minus ________. A) total assets; total liabilities
A) total assets; total liabilities
B) total liabilities; total assets
C) total assets; total reserves
D) total liabilities; total borrowings
Bank ________ is/are listed on the liability side of B) capital
the bank's balance sheet.
A) reserves
B) capital
C) securities
D) cash items
