FIN 366 Final Exam Guide 20 Question Multiple Choice and True/False Type 1. � In current years, the number of commercial banks in the U.S. has been rising. a. � True or False 2. � Life insurance agencies also administer personal pension plans which comprise the proposal of guaranteed investment contracts (GICs). a. � True or False 3. � Which of the subsequent take place when administrators take on growth-oriented investments to boost an FI’s size that may be conflicting with stockholders’ value-maximizing objectives? a. � Technology risk b. � Operational efficiency c. � Agency conflicts d. � Diseconomies of scale e. � Diseconomies of scope 4. � Which is the fundamental goal of a commercial bank? a. � long-term growth b. � deposit growth c. � bank safety d. � long-term profit maximization 5. � Under the Glass-Steagall Act commercial banks were allowed to countersign and trade Federal government securities and general obligation bonds of states and municipalities. a. � True or False 6. � All of the underneath are the key services of investment banking firms except a. � making commercial loans b. � bringing new security issues to market c. � trading securities d. � brokerage 7. � Which of the underneath legislations permitted banks and thrifts to develop geographically across state lines by obtaining the benefits of unsuccessful thrifts? a. � Bank Holding Company Act b. � McFadden Act c. � Financial Institutions Reform, Recovery, and Enforcement Act d. � Douglas amendment e. � Glass-Steagall Act 8. � Savings deposits are a superior percent of financial support for small banks, compared to large banks. a. � True or False 9. � Social Security is a completely funded pension program. a. � True or False 10. � Which of the underneath is factual about private placement? a. � The underwriting function is avoided. b. � The extremes of high credit quality firms and low or unknown credit quality firms use private placements. c. � The terms may be negotiated between the issuer and the investors. d. � The sale of securities must be restricted to a small group of accredited investors. e. � All of the above is true. 11. � Which of the underneath money market rates is calculated intimately for pointers of alterations in Federal Reserve monetary policy? a. � Federal Funds b. � Treasury bills c. � commercial paper d. � banker’s acceptances 12. � A Mexican importer of computer parts from Canada would take which undertaking in the foreign exchange markets? a. � supply Canadian dollars b. � demand pesos c. � demand Canadian dollars d. � demand U.S. dollars e. � none of the above 13. � Which of the underneath laws is not connected with U.S. guideline of international banking? a. � Federal Reserve Act of 1913 b. � Edge Act of 1919 c. � National Banking Act of 1863 d. � International Banking Act of 1978 14. � Which of the underneath is not an instance of capital market securities? a. � common stocks b. � convertible bonds c. � commercial paper d. � mortgages 15. � A capital market financing is almost certainly to finance a. � new plant and equipment. b. � seasonal inventory needs. c. � a quarterly dividend payment. d. � the sale of common stock. 16. � At NYSE, limit orders are generally entered into the specialist’s limit order book. a. � True or False 17. � A publicly traded corporation issuing supplementary shares of common stock does it through an IPO. a. � True or False 18. � A foreign exchange rate are best depicted as a. � the cost of a unit of foreign currency. b. � the current interest rates of varying countries. c. � the cost of a unit of one currency in terms of another currency. d. � the expected change in prices of international goods. 19. � Which of the underneath is not a issue connected with international trade not encountered by domestic traders? a. � One party in the trade has to be concerned about foreign exchange risk. b. � No one legal authority has control over the transaction and legal remedies. c. � Credit information on opposite parties is often incomplete. d. � There is one currency involved. 20. � A shortage in the trade equilibrium of payments puts downhill pressure on the exchange rate. a. � True or False
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