BANKING AND FINANCIAL SYSTEMS 51-100
67) Banks with the word "National" in their name or the initials "N.A." following their name that are members of the Federal Reserve System are chartered and supervised by the
A) Office of Thrift Supervision.
B) Federal Reserve headquarters bank that serves the district the bank is in.
C) Federal Deposit Insurance Corporation.
D) Office of the Comptroller of the Currency.
69) _______________ is a collective rise in the supply of money, income, and prices.
93) An office building that was purchased five years ago for $570,000 was recently assessed for real estate tax purposes at 144% of its purchase price. The building's current assessed valuation is:
A) $ 820,800
B) $ 808,200
C) $ 395,833
98) Which of the following accounts is most liquid?
A) checking account
B) certificate of deposit
C) savings account
D) money market account
87) The system used by the Federal Reserve to sell securities and record and store data about Treasury securities and their owners is called
A) New York Stock Exchange.
B) Treasury Direct.
C) Electronic Treasury Securities.
D) Federal Reserve Connection.
51) Bonnie Bryce stopped by the family's insurance agency, Feelsafe Insurance, to pay the auto insurance premium on their policy with Redline Casualty. A month later, she received a cancellation notice from Redline. When she called Redline, she was told that Feelsafe had never forwarded her premium payments. An investigation revealed that Feelsafe's principal owner had used the funds to pay his own bills. It is likely that
A) regulatory authorities will have no interest in this case, since it is a matter for the local law enforcement.
B) the Bryces will be able to bring about a civil suit against Feelsafe and that one or more people at Feelsafe Insurance will lose their license to sell insurance.
C) any criminal action against Feelsafe and its owners will have to be tried in a federal court, since insurance is regulated at the national level.
D) Feelsafe's actions are neither unethical nor illegal.
100) Letters of credit are used in international finance to
A) provide funds for public sector projects sponsored by the World Bank in developing countries that do not have a banking system or that lack the resources to provide basic services (such as water and power) for their people.
B) transfer money from the U.S. Export-Import (Ex-Im) Bank to foreign governments.
C) provide support for business loan applications to foreign banks.
D) bring about a movement of funds from a buyer's bank to a seller's bank by testifying to the borrower's favorable credit standing.
What is your name?
What is the password?
74) The act that allows a consumer to change his or her mind about a loan until midnight of the third business day following the signing of the papers is the
A) Truth in Lending Act.
B) Equal Credit Opportunity Act.
C) Fair Debt Collection Practices Act.
D) no such law--let the buyer beware.
83) A federal law allows banks to send you "substitute checks" in place of your original cancelled checks. What is this law called?
A) Digital Cancel
B) Check 21
C) encrypted checking
D) electronic banking
73) The Second Bank of the United States
A) gained strength throughout the life of its first charter.
B) was thought by Andrew Jackson to represent the advancement of the few at the expense of many.
C) bowed to political pressure and made no attempt to regulate credit and the money supply.
D) was considered a great friend by state banks.
The Health Insurance Portability and Accountability Act of 1996
A) limits the pre-existing illnesses and other aspects of an insured's physical condition that group health insurers may choose not to cover.
B) allows insurers to deny health insurance to applicants based on their physical condition and previous illnesses they have had.
C) applies to both individual and group health insurance.
D) places limits on the premiums that group health insurers may charge.
92) Employees fill out a ______ Form to instruct employers on the amount of Federal taxes to withhold from income.
65) The Federal Reserve offers employment opportunities to a wide range of qualified personnel. Which of the following, however, is not a position offered by the Federal Reserve?
B) check processor
C) bank teller
D) bank examiner
72) What is the central banking system of the United States?
A) Federal Reserve Bank
B) Citi Bank
C) Bank of America
D) S. Bank
82) Which of the following is not a reason for managing finances online?
A) software is available anywhere there is an Internet connection
B) software stores data securely on automatic back ups
C) greater rate of return on investments than manual management of finances
D) inexpensive to manage money online
78) One of the purposes of the Gramm-Leach-Bliley Act is to
A) prevent discrimination against those living in poor, inner city neighborhoods who want to purchase homes.
B) force lenders to tell borrowers how much interest they would pay on a loan, the amount of other finance charges, and the payment terms of the loan.
C) encourage on-line banking and the use of automated teller machines.
D) allow banking consumers a way to restrict the use of personal information.
57) Ari Levy invested $46,500 in the Mayflower Aggressive Growth Fund. This fund charges a 3% front-end load but no back-end load. Two years later, the value of his investment had grown by $9,620, and Ari elected to invest these funds in another mutual fund. At the time of the withdrawal, Ari's account balance was
86) The use of a Multiple Listing Service (MLS) occurs in which financial services field?
A) Real Estate
C) Securities Brokerage
71) What is a T-Bill?
A) Treasury securities that are like stocks and are traded by investors on a daily basis.
B) Government securities that are backed by the Federal Government and bought at premium.
C) A Treasury bill is like a bond in the denomination of $1000 and payable in less than one-year.
D) A Treasury bond that is in the denomination of $10,000 and payable at different times.
80) Most types of businesses keep tax records for all of the following except
A) payroll deductions.
B) profit tax.
C) income tax.
D) sales tax.
68) The only state in which two Federal Reserve district headquarters banks are located is
88) When creating a financial plan for a customer, you will most likely utilize the following combination of software applications:
A) word processing and desktop publishing software
B) word processing and presentation software
C) spreadsheet and database software
D) word processing and spreadsheet software
70) The Federal Reserve uses which of the following to review a bank's financial condition, management, and compliance?
B) largest bank in the area as a benchmark
D) CAMELS system
66) One unique feature of the $50 bill is the
A) use of lower case letters for the words "Federal Reserve Note."
B) image of the U.S. Capitol building on the reverse of the bill.
C) picture of Alexander Hamilton on the front of the bill.
D) Great Seal of the United States on the back of the bill.
55) Ditech, Lending Tree.com, and E-Loan.com are Internet sites that help consumers
A) compare loan rates.
B) get copies of their credit bureau files.
C) compare their "credit scores."
D) calculate their "credit scores."
62) At some banks, it is possible that you will be charged for all of the following except
A) making a deposit to your savings account.
B) applying for a loan.
C) having the teller calculate your checking account balance.
D) checking on your account balance at or getting money from an ATM.
91) Single people earning less than $50,000 per year, will most likely use the
A) 1040EZ Form.
B) W-2 Form.
C) 1040A Form.
D) 1040 Form.
79) Giorgiana Brusconini deposited her paycheck in her checking account, which carries ATM privileges. A week later, she is unable to withdraw funds at the ATM. She called the bank and the bank's customer service representative found that the bank had not yet processed her paycheck. The bank did not notify her that the paycheck had been held. The law that sets forth the rights and responsibilities of Giorgiana and her bank in this case is the
A) Expedited Funds Availability Act.
B) Fair Electronic Banking Act.
C) Automated Teller Use Protection Act.
D) Electronic Funds Transfer Act.
89) Financial amounts are calculated by using spreadsheet:
75) Which of the following organizations is a partner in strengthening economies by lending money to developing countries and expecting the loans to be repaid rather than serving as an aid program?
B) World Bank
C) Children Abroad
59) What are three areas of information that are found on a Profit and Loss Statement?
A) income, expenses, and profits
B) accounts, turnover, and depreciation
C) assets, profits, and revenue
D) depreciation, dividends, and assets
60) The comparison of a firm's total cash and near cash account balances with its current liabilities is sometimes referred to as the
A) turnover ratio.
B) common ratio.
C) current ratio.
D) quick ratio.
95) Taxes owed are reduced dollar-for-dollar on a personal or corporate income tax return by
A) tax credits.
B) withholding adjustments.
C) exempt deductions.
D) adjustments to income.
76) Investment transactions that take place in insurance companies are regulated by
A) the federal government.
B) the state government.
C) the insurance industry.
D) the local government.
81) ________ is a type of software to prepare income tax forms.
D) Turbo Tax
85) Technology used to provide security for the use of electronic signatures involves all the following except
A) "private keys" stored on a disk or hard drive with password security.
B) the use of 128 digit numbers that reflect a customer's vital statistics, such as age and income.
C) biometrics, such a fingerprints or iris patterns.
D) standard software used by all businesses that recognizes the customer's key stroking timing and reach patterns when electronic signatures are being entered.
56) Which one of the following is not an advantage of direct deposit for customers?
D) small service fee
96) What is the major difference between consumer finance companies and sales finance companies?
A) A consumer finance company is for loans under $500 and a sales finance company is for loans over $500.
B) A consumer finance company makes mainly consumer loans to customers buying consumer durables and a sales finance company make loans through authorized representatives.
C) A consumer finance company is for buyers only and the sales finance company is for sellers only.
D) A consumer finance company requires a consumer as a co-signer and the sales finance company does not.
99) Which of the following is a nondepository intermediary?
A) savings and loan association
B) commercial bank
C) credit union
D) insurance company
61) What is the charge added to a loan payment if the payment is made after a specified date?
A) fixed charge
B) interest charge
C) late charge
D) debit charge
53) All media of exchange that is currently circulating in a country is
58) The Abbots want to purchase a home that costs $176,000. For borrowers purchasing their first home, their lending institution requires a down payment of 16.5% on homes costing between $150,000 and $200,000. The Abbots will have to make a down payment of
97) Investment banks
A) guarantee the rate of return on customers' deposits.
B) are not insured by the FDIC.
C) primarily work in the investment markets.
D) take customer deposits.
90) A program that constantly monitors all transactions looking for abnormalities and helping to prevent hackers from gaining access to systems or records is
A) a pin.
B) a firewall.
C) a do-not-call entry.
D) an autobot.
54) The monetary unit known as the "Euro" is an official unit of currency in each of the following countries except
84) Your bank might make an automatic debit to your checking account for the purpose of
A) transmitting a monthly insurance premium to your insurance company.
B) processing a monthly funds transfer from your investment accounts into the checking account.
C) adding monthly interest on a qualifying account balance.
D) getting a reimbursement from you for an NSF check.
63) Lenders must be careful when extending credit to potential borrowers. In order to reduce risk, credit-scoring systems (such as FICO) are used to assess the applicant's suitability for credit. Factors included in such scoring systems include all of the following except
A) amounts currently owed.
B) length of credit history.
C) payment history.
D) marital status.
64) What is the name of the federal government agency that insures all bank deposits up to $250,000 per person?
A) Federal Depository Interest Corporation
B) Federal Deposit Insurance Corporation
C) Federal Bank Insurance Company
D) National Deposit Insurance Company
94) What is an expense that you have an option to incur, but not an obligation to incur?
A) fixed expenses
B) flexible expenses
C) variable expenses
D) discretionary expenses
52) The portrait on the front of a ten-dollar note is
A) Andrew Jackson.
B) Abraham Lincoln.
C) Benjamin Franklin.
D) Alexander Hamilton.
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