FIN 300 ACTUAL FINALS QUESTIONS AND
ANSWERS SURE A+
✔✔Open market operations:
a. cannot be conducted by the Federal Reserve as a matter of law
b. are used in an attempt to manipulate the economy through changes in short-term
interest rates and the money supply
c. refers to raising and lowering of the Federal Reserve discount rate
d. are conducted quarterly by the Federal Reserve - ✔✔b. are used in an attempt to
manipulate the economy through changes in short-term interest rates and the money
supply
✔✔An S&L with a portfolio of mortgages has a positive interest-rate spread and interest
rates are rising:
a. the net profit margin will fall
b. the S&L will have to reprice more deposits than loans
c. there will be no net effect on profits
d. the net interest margin will rise - ✔✔a. the net profit margin will fall
✔✔Primary Reserves:
a. include marketable securities
b. include vault cash and deposits held at the Federal Reserve
c. provide all the liquidity commercial banks need
d. include only Treasury securities - ✔✔b. include vault cash and deposits held at the
Federal Reserve
✔✔National commercial banks are examined primarily by:
a. the Comptroller of the
Currency
b. the FDIC
c. the Federal Reserve
d. The state banking authorities - ✔✔a. the comptroller of the Currency
, ✔✔State nonmember insured commercial banks are examined primarily by:
a. the Comptroller of the Currency
b. the FDIC
c. the Federal Reserve
d. The state banking authorities - ✔✔b. the FDIC
✔✔Commercial banks that are state member banks are examined primarily by:
a. the Comptroller of the Currency
b. the FDIC
c. the Federal Reserve
d. The state banking authorities - ✔✔c. the Federal Reserve
✔✔The flow of saving from surplus economic units to deficit economic units through
financial institutions is called:
a. open market operations.
b. intermediation.
c. direct financial investment.
d. commercial banking. - ✔✔b. intermediation
✔✔When a savings and loan association issues 1000 savings accounts at $500
average balance and makes one mortgage loan for $500,000, this intermediation
function is called:
a. maturity matching intermediation.
b. credit risk intermediation.
c. denomination matching intermediation.
d. geographical intermediation - ✔✔c. denomination matching intermediation
✔✔Commercial banks focus on making _________ loans, while savings and loans tend
to specialize in _________ lending.
a. consumer; mortgage
b. mortgage; commercial or business
c. commercial or business; mortgage
d. student; consumer - ✔✔c. commercial or business; mortgage
✔✔Which of the following commercial bank regulations is associated with Federal
Reserve monetary policy?
a. Federal or State charter requirements
b. FDIC insurance mandated
c. Required reserves
d. Disclosure of information to consumer customers - ✔✔c. required reserves
✔✔In managing a commercial bank's liquidity, its managers must maintain both primary
and secondary reserves, the latter of which is:
ANSWERS SURE A+
✔✔Open market operations:
a. cannot be conducted by the Federal Reserve as a matter of law
b. are used in an attempt to manipulate the economy through changes in short-term
interest rates and the money supply
c. refers to raising and lowering of the Federal Reserve discount rate
d. are conducted quarterly by the Federal Reserve - ✔✔b. are used in an attempt to
manipulate the economy through changes in short-term interest rates and the money
supply
✔✔An S&L with a portfolio of mortgages has a positive interest-rate spread and interest
rates are rising:
a. the net profit margin will fall
b. the S&L will have to reprice more deposits than loans
c. there will be no net effect on profits
d. the net interest margin will rise - ✔✔a. the net profit margin will fall
✔✔Primary Reserves:
a. include marketable securities
b. include vault cash and deposits held at the Federal Reserve
c. provide all the liquidity commercial banks need
d. include only Treasury securities - ✔✔b. include vault cash and deposits held at the
Federal Reserve
✔✔National commercial banks are examined primarily by:
a. the Comptroller of the
Currency
b. the FDIC
c. the Federal Reserve
d. The state banking authorities - ✔✔a. the comptroller of the Currency
, ✔✔State nonmember insured commercial banks are examined primarily by:
a. the Comptroller of the Currency
b. the FDIC
c. the Federal Reserve
d. The state banking authorities - ✔✔b. the FDIC
✔✔Commercial banks that are state member banks are examined primarily by:
a. the Comptroller of the Currency
b. the FDIC
c. the Federal Reserve
d. The state banking authorities - ✔✔c. the Federal Reserve
✔✔The flow of saving from surplus economic units to deficit economic units through
financial institutions is called:
a. open market operations.
b. intermediation.
c. direct financial investment.
d. commercial banking. - ✔✔b. intermediation
✔✔When a savings and loan association issues 1000 savings accounts at $500
average balance and makes one mortgage loan for $500,000, this intermediation
function is called:
a. maturity matching intermediation.
b. credit risk intermediation.
c. denomination matching intermediation.
d. geographical intermediation - ✔✔c. denomination matching intermediation
✔✔Commercial banks focus on making _________ loans, while savings and loans tend
to specialize in _________ lending.
a. consumer; mortgage
b. mortgage; commercial or business
c. commercial or business; mortgage
d. student; consumer - ✔✔c. commercial or business; mortgage
✔✔Which of the following commercial bank regulations is associated with Federal
Reserve monetary policy?
a. Federal or State charter requirements
b. FDIC insurance mandated
c. Required reserves
d. Disclosure of information to consumer customers - ✔✔c. required reserves
✔✔In managing a commercial bank's liquidity, its managers must maintain both primary
and secondary reserves, the latter of which is:
