Test Item File- Practice Test Bank - The U.S. Banking System,Center for Financial Training,3e

1. A bank is a not-for-profit organization.
a. True

b. False

ANSWER: False

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.1.1 - LO: 1.1.1



2. All federally chartered banks must be corporations.
a. True

b. False

ANSWER: True

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.1.1 - LO: 1.1.1



3. Commercial banks offer their services only to businesses.
a. True

b. False

ANSWER: False

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.1.1 - LO: 1.1.1



4. Record keeping is an important part of securing your money in a bank.
a. True

b. False

ANSWER: True

POINTS: 1

,LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.2.1 - LO: 1.2.1



5. Issuing credit cards is a form of bank lending.
a. True

b. False

ANSWER: True

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.2.2 - LO: 1.2.2



6. It is illegal for banks to charge higher interest rates for loans than they pay depositors.
a. True

b. False

ANSWER: False

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.3.1 - LO: 1.3.1



7. Generally speaking, banks offer customers fewer services today than they did 20 years ago.
a. True

b. False

ANSWER: False

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.1.2 - LO: 1.1.2



8. Interest on home-equity loans often is tax-deductible for consumers.
a. True

b. False

ANSWER: True

,POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.3.2 - LO: 1.3.2



9. A credit union is a not-for-profit organization.
a. True

b. False

ANSWER: True

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.4.1 - LO: 1.4.1



10. A loan company is not a financial intermediary because it does not receive deposits.
a. True

b. False

ANSWER: False

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.4.2 - LO: 1.4.2



11. Return on equity is the ratio of net income to total assets.
a. True

b. False

ANSWER: False

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.3.1 - LO: 1.3.1



12. Which of the following statements about banks is NOT true?

, a. Banks distribute the medium of exchange.

b. All banks are organized as corporations.

c. Banks may be chartered by either federal or state governments.

d. Banks are essential to maintaining the economy.

ANSWER: b

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.1.1 - LO: 1.1.1



13. Banks that manage, regulate, and protect both the money supply and other banks are
a. retail banks.

b. central banks.

c. commercial banks.

d. credit unions.

ANSWER: b

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.1.1 - LO: 1.1.1



14. One result of competition among banks is that
a. more services are available to consumers.

b. more banks exist now than a decade ago.

c. the trend toward mergers in the banking industry has slowed.

d. all of the above.

ANSWER: a

POINTS: 1

LEARNING OBJECTIVES: BNKG.CFFT.3.LO: 1.1.2 - LO: 1.1.2