Banking Quiz Chapter 1

In banking, organizational form follows __________ because banks usually are organized in such a way as to carry out the tasks and supply the services demanded of them. The term that correctly fills in the blank in the sentence above is:

• Bank size

• Management's decision

• Function

• Regulation

• Location

Which one of the following is charged with setting policy and overseeing a bank's performance?

• Stockholders

• Board of directors

• Regulators

• Depositors

• None of the above.

The largest banks possess some potential advantages over small and medium-size banks, according to the textbook. What specific advantage of the largest banks over small and medium-sized banks is not mentioned in the text?

• Greater diversification geographically and by product line

• Availability of financial capital at lower cost

• Greater professional expertise to allocate capital to the most promising products and services

• Better positioned to take advantage of the opportunities afforded by interstate banking.

• All of the above were mentioned in the text as advantages typically possessed by the largest banks.

Before any financial services can be offered to anyone a bank in the United States must have a:

• Certificate of deposit insurance

• Charter of incorporation

• List of established customers

• New building constructed to be the bank's permanent home

• None of the above.

In the United States there are close to __________ commercial banks in operation. Which number shown below is closest to the actual total number of U.S. banks operating in the U.S.?

• 20,500

• 13,500

• 11,500

• 9,000

• 7,500

The concentration of U.S. bank deposits in the hands of the largest banks has _________ during the most recent period,

• Declined

• Increased

• Remained essentially unchanged

• Exhibited large fluctuations in both directions

• None of above.

Bank holding company organizations have several advantages over other types of banking organizations. Among the advantages mentioned in this chapter is:

• Greater ease of access to capital markets

• Tax advantage

• Product-line diversification

• All of the above.

• None of the above.

A company which owns the stock of three different banks is known as a(n):

• Unit Bank

• Interstate Bank

• One Bank Holding Company

• Multi Bank Holding Company

• None of the above

Which of the following is considered an advantage of branch banking?

• Increased availability and convenience of services

• Decreased chance of failure

• Reduced transaction costs

• B and C above

• All of the above

The types of nonbank businesses a bank holding company can own include which of the following?

• Retail Computer Store

• Security Brokerage Firm

• Retail Grocery Store

• Wholesale Electronic Distribution Company

• All of the above