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Question
What role does the SEC have in regulating options markets? How does it differ from the role of CFTC?Answer
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Related questions
Q:
In recent years, know-your-clients (KYC) is required by international financial regulators. In the U.S., what is the act that requires financial institutions to share information about customer identities with appropriate government agencies?
a. The USA Patriot Act
b. The Sarbanes-Oxley Act
c. The 9/11 Act
d. The U.S. Treasury Department Act
e. The Gramm-Leach-Bliley Act
Q:
A state-chartered bank which is not a member of the Federal Reserve System will
never be examined by the
a. state banking authority
b. FDIC
c. OCC
d. Fed
Q:
Which of the following regulators is also the lender of last resort?
a. FDIC
b. Office of Comptroller of Currency
c. Office of Thrift Supervision
d. Federal Reserve System
Q:
If FDIC tends to charge depository institutions less than the full cost of deposit insurance in its risk-based deposit premium system,
a. the banks will be upset with FDIC.
b. the risk-based premium system will adequately "tax" the excess risk returns of banks that have made risky investments.
c. the moral hazard associated with deposit insurance is still present.
d. the regulator will not have to worry about banks taking excessive risk.
Q:
If bank managers lobby to maintain America's traditional "dual banking" structure, they:
a. want an option of either federal or state bank chartering.
b. want to maintain the right to make loans and take deposits.
c. want the right to fight competition.
d. want the option of remaining a bank or a bank holding company.
Q:
The presence of moral hazard incentives
a. reduces the need for close regulatory supervision.
b. increases the need for more regulations, examinations, and regulators.
c. reduces the church attendance rate of bank managers.
d. increases the role of markets in disciplining excessive risk-taking.
Q:
All of the following are reasons to regulate depository institutions except:
a. To promote safety and soundness.
b. To affect the structure of banking.
c. To make sure bank capital ratios are competitive.
d. To protect the interest of consumers.
Q:
Private or state deposit insurance funds have not successfully prevented panic because
a. the size of the funds was more than enough to pay all depositors.
b. they overcharged the institutions on their premiums.
c. they did not have a "deep pocket" with unlimited borrowing power like Congress behind them.
d. the regulation of the depositors was not as restrictive as it should have been.
Q:
Moral hazard incentives for undesirable manager behavior may have been created by
a. a "too big to fail" policy.
b. a flat proportional premium charge to banks and thrifts for deposit insurance.
c. regulatory accounting practices, which inflated capital ratios.
d. all of the above
Q:
Financial institutions are regulated for the following reason(s):
a. they provide essential financial services to consumers and businesses.
b. there is a need to control the money supply.
c. government has promised to insure deposits.
d. all of the above
Q:
In a purchase and assumption of a failed bank, an assuming bank may be required to invest funds for all but one of the following reasons:
a. acquire the sound assets of the failed bank
b. acquire the deposit liabilities
c. pay a premium for the intangible value of the bank
d. infuse sufficient cash to provide adequate capitalization.
Q:
The maximum amount of FDIC deposit insurance per eligible retirement account is
a. $25,000
b. $50,000
c. $250,000
d. $150,000
Q:
Regulations provide financial institutions certain benefits such as
a. reducing the chance of failure.
b. increasing the cost of funds.
c. increased labor cost to comply with regulations.
d. increased profit from the added compliance costs.
Q:
Bank capital is the most reliable cushion that prevents a decline in asset values from threatening the integrity of bank deposits.
Q:
Bailout of large banks by federal regulators is an example of market discipline.
Q:
Banks are regulated in part to protect the nation's money supply, much of which is a liability of the banking industry.
Q:
A "too big to fail" policy encourages small banks to take higher risks.
Q:
The Office of the Comptroller of the Currency (OCC) is the oldest bank regulatory agency.
Q:
A foreign branch office of a U.S. bank is regulated by
a. U.S. bank regulations
b. the host country bank regulation.
c. the FDIC.
d. the SEC.
e. both a and b
Q:
All of the following are techniques reducing credit risk in international lending except
a. foreign government guarantees of loans to private corporations.
b. pooling risk through syndication with other banks.
c. making floating-rate loans as opposed to fixed-rate loans.
d. diversification.
Q:
Which of the following is associated with the currency risk of international lending by a U.S. bank?
a. The Spanish borrower is slow to pay the U.S. bank.
b. The U.S. bank is paid dollars by its foreign borrowers.
c. A U.S. bank receives an interest payment from a French borrower paid in Euros.
d. A U.S. bank holds a mortgage on property in a country in the middle of a civil war.
Q:
International bank lending is characterized by all of the following except that loans
a. are unsecured.
b. have floating rates.
c. are made for relatively small amounts.
d. are priced relative to the LIBOR.
Q:
Which of the following forms of international banking organization was intended to bring offshore, shell banking back to the U. S.?
a. Edge Act banks
b. correspondent bank
c. international banking facility
d. foreign subsidiary bank
Q:
While country central banks have pursued their own country interests, recently under the framework of the Bank for International Settlements, central banks from leading economies have agreed to
a. allow international banks to branch throughout every country involved.
b. stabilize interest rates.
c. establish minimum capital ratios for international banks.
d. maintain fixed exchange rates.
Q:
Most large international loans are funded in the Eurocurrency market.
Q:
If a hedge fund manager focused on short-selling of stocks, he/she would
a. invest in company stock for short-term profits.
b. invest in companies with high future growth prospects.
c. borrow money to invest in stocks.
d. select companies where the future supply of securities might exceed demand.
Q:
Which of the following is not the difference between hedge funds and mutual funds?
a. Mutual funds are registered with the SEC, while hedge funds are not.
b. Unlike mutual funds, hedge funds borrow significant amounts of their capital.
c. Unlike mutual funds, hedge funds concentrate their investment in very few areas.
d. Unlike mutual funds, hedge funds are managed by professional fund managers.
Q:
Hedge funds would provide investor portfolio diversification benefits if:
a. the correlation of returns from the hedge fund and the investor's portfolio is close to +1.
b. the hedge fund and the portfolio are investing in the same things.
c. the correlation of returns from the hedge fund and the investor's portfolio is negative.
d. the hedge fund portfolio includes none of the investments of the investor's portfolio.
Q:
Which of the following mutual fund types is likely to have the highest risk exposure?
a. growth and income funds
b. aggressive growth funds
c. balanced funds
d. income-equity funds
e. money market funds
Q:
Mutual fund managers can keep their cash balances low by all but one of the following:
a. maintaining lines of credit at commercial banks
b. increasing redemption fees
c. working to maintain low NAV
d. redeeming shares with stock