FIN 582 Final Exam Questions and Answers All Correct

FIN 582 Final Exam Questions and Answers All Correct T/F: The volume of core deposits at U.S. banks has been growing in recent years relative to other categories of deposits. - Answer-False T/F: The Truth in Savings Act requires a bank to disclose to its deposit customers, the frequency with which interest is compounded on all interest-bearing accounts. - Answer- True T/F: Research indicates that at least half of all households and small businesses hold their primary checking account at a depository institution situated within 3 miles of their location. - Answer-True T/F: A bank has full control over its deposit prices in the long run. - Answer-False T/F: NOW accounts can be held by businesses and individuals and are interest-bearing checking accounts. - Answer-False T/F: According to recent studies cited in this chapter, the number one factor that households consider in selecting a bank to hold their checking account is low fees and low minimum balance. - Answer-False T/F: Deposits are usually priced separately from loans and other bank services - Answer-True T/F: When a bank temporarily offers higher than average interest rates or lower than average customer fees in order to attract new business, they are practicing conditional pricing. - Answer-False T/F: Interest payments on regular checking accounts were prohibited in the United States under terms of the: - Answer-Glass-Steagall Act T/F: Legally imposed interest-rate ceilings on deposits were first set in place in the United States after passage of the Bank Holding Company Act. - Answer-False T/F: An annuity is a product that offers shares in a pool of securities (stocks, bonds, etc.) and flows through any earnings generated to the shareholding customer. - Answer- False T/F: A proprietary mutual fund is where the bank sells a mutual fund through one of their affiliated companies and where the bank can act as an investment advisor. - Answer- True T/F: Trust services have no impact on the deposits of the bank. - Answer-False T/F: The product-line diversification effect occurs when the revenues generated by traditional banking service and a nontraditional banking service are not very correlated with each other and reduce the overall risk of the bank. - Answer-True T/F: An insurance product or annuity sold by a depository institution is not insured by the FDIC. - Answer-True Which of the following trust agreements allows the bank trust officer to act on behalf of a living customer? - Answer-Revocable trust A trust department's activities often center around establishing: - Answer-a fiduciary relationship with the customer A bank would offer insurance services in addition to traditional banking services if it believed in the potential benefits of: - Answer-economies of scope T/F: One attractive feature of investment banking is that it is generally less risky than commercial banking. - Answer-False T/F: The prohibition against combining investment banking and commercial banking activity during the Depression-era, centered on possibly forcing customers seeking loans to buy securities that the IB was trying to sell and increasing the risk exposure of commercial banking firms. - Answer-True Basel II had a different set of capital rules for different banks, and the number of categories is: - Answer-two T/F: In the field of banking, capital refers principally to those funds contributed by a bank's owners. - Answer-True