PT Ch03

PT Ch03 - Exam Name MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1 Which of the below

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the below statements is FALSE? 1) A) Fee income is generated from brokerage services and financial investment services. B) Loans and leasing generate dividend income, and other services that banks offer institutional customers generate fee income. C) Interest income and fee income are generated from mortgage lending and credit card financing. D) Loans to nonfinancial corporations, financial corporations, (such as life insurance companies), and government entities (state and local governments in the United States and foreign governments) fall into the category of institutional banking. 2) The Garn - St. Germain Act, not only granted thrifts the right to offer money market demand 2) A) broadened B) maintained C) limited D) shortened 3) Which of the below statements is FALSE? 3) A) Absent from any balance sheet of a depository institution is interest rate risk exposure. B) Managers must be willing to accept some exposure, but they can take various measures to address the interest rate sensitivity of the institution's liabilities and its assets. C) A depository institution will have an asset/liability committee that is responsible for monitoring the interest rate risk exposure. D) Regulators impose restrictions on the degree of interest rate risk a depository institution may be exposed to. 4) The three sources of funds for banks are ________. 4) A) deposits, nondeposit borrowing, common stock, and retained earnings. B) salaries, nondeposit borrowing, common stock, and retained earnings. C) deposits, salaries and wages, common stock, and retained earnings. D) deposit borrowing, bonds, and retained earnings. 5) Risk - based capital guidelines establish a ________ weight for all assets where a weight depends on the credit risk associated with each asset. 5) A) commercial bank risk B) guideline - based C) credit risk D) scientific - based 6) Because of their important role, ________ are afforded special privileges such as access to federal deposit insurance and access to a government entity that provides funds for liquidity or emergency needs. . 6) A) repository institutions B) depository invitations C) depository institutions D) NOW accounts 1
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7) Which of the below statements is TRUE? 7) A) Since their funds are raised through deposits and other funding sources, depository institutions cannot make direct loans to various entities or invest in securities. B) Depository institutions derive their income from two sources: (1) the income generated from
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PT Ch03 - Exam Name MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1 Which of the below

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