Q&A Hero

Q: One argument frequently presented for regulation and control over bank chartering activity is that banks can create money and chartering too many might result in excessive money creation and inflation in the economy.

Q: The FDIC Improvement Act requires that all depository institutions must have FDIC insurance.

Q: Fees for ATMs are larger and more common if a customer uses another financial institution's ATM because most institutions charge each other _____________ fees.

Q: The _____________ of setting up a new ATM is the present value of the future stream of cash savings discounted at the firm's required rate of return less the total cash outlay for the ATM.

Q: The most effective delivery channel of financial services appears to be ____________. It combines full-service branches and electronic limited service facilities within the same firm.

Q: Depository institutions are required to get their deposits insured from the ____________.

Q: For most of the history of financial service providers, convenience' has meant ____________.

Q: The acronym ACH stands for _____________.

Q: ____________________________________________ allows customers to carry pocket-sized terminals with them and pay for goods and services and transfer funds as needed. These are already popular in Europe.

Q: A(n) ______________________ bank is one that offers its services only through the Internet. It does not have any brick-and-mortar offices.

Q: ____________________ reduces a bank's overall risk exposure by establishing service facilities in different market areas.

Q: The ______________________ can be calculated when the present value of the future net cash flows are set equal to the initial cash outflow. It is the interest rate that is actually earned on a new project.

Q: A(n) ______________________ is a full service facility which offers many of the same services as the home or main office of a bank.

Q: "Virtual" banks are found on the ____________________, and more and more banks are using this medium to deliver selected services.

Q: A(n) ______________________ combines a computer terminal, record keeping system, and vault cash in one unit allowing customers to withdraw money, check deposit balances, and other limited services 24 hours a day.

Q: A(n) ______________________ terminal in a retail store allows a customer to pay for goods and services by instantly debiting his or her checking account.

Q: Banks which offer services with in the grocery stores and other retail outlets are offering services from a(n) ______________________ branch.

Q: ______________________ is demonstrated by organizers of new banks by showing that local banks are not conveniently located or fail to offer some key services.

Q: The ____________________ issues charters for new state banks.

Q: The ______________________ issues charters for new national banks.

Q: The state banking commissions (at the state level) and the Office of the Comptroller of the Currency (at the federal level) are the only ones able to issue a(n) ______________________ for a new U.S. bank.

Q: Which of the following is a reason for the rapid growth in branch banks? A. Exodus of population from cities to suburban areas B. Bank convergence C. Business failures D. Decreased costs of brick-and-mortar E. All the options are correct

Q: ____________ and ___________ banks tend to be larger and hold more of the public's deposits in the United States. A. National, member B. State, nonmember C. National, uninsured D. State, insured E. None of the options are correct

Q: Member banks are: A. members of the FDIC. B. national banks. C. unit banks. D. members of the Federal Reserve System in the U.S. E. All the options are correct.

Q: Majority of banks today are: A. federally chartered. B. uninsured. C. state chartered. D. national banks. E. All the options are correct.

Q: A "typical" money center bank: A. has a complex organizational chart. B. is often plagued by span of control. C. is owned by a bank holding company. D. is well diversifiedboth geographically and by product line. E. All the options are correct.

Q: A typical' community bank is committed to: A. attracting deposits from large companies. B. attracting deposits from high net-worth individuals. C. making loans to large corporates. D. making loans to small households. E. None of the options are correct.

Q: About a quarter of all commercial banks in the U.S. are: A. investment banks B. branch banks C. unit banks D. virtual banks E. bank holding companies

Q: Relative to manufacturing firms, banks tend to have ___________ number of board members. A. same B. larger C. smaller D. insignificant E. None of the options are correct

Q: Websites known as electronic branches offer all of the following except: A. Internet banking services. B. ATMs. C. point of sale terminals. D. computer and phone services connecting customers. E. traveler's checks.

Q: Over the last half-a-decade, the number of banks in the U.S. has __________ and the number of branches has ________. A. declined; increased B. grown; increased C. grown; decreased D. declined; decreased E. stabilized; stabilized

Q: Which of the following is a type of service that a bank holding company is not allowed to own? A. Merchant banking company B. Savings and loan association C. Retail electronics equipment sales company D. Security brokerage firm E. Insurance agency

Q: What is a bank holding company? A. It is a bank that offers all of its services out of one office B. It is a bank that offers all of its services out of several offices C. It is a corporation formed to hold the stock of one or more banks D. It is a merchant bank E. None of the options are correct

Q: Which of the following is a reason that many states and the federal government finally enact interstate banking laws? A. The need for new capital in order to revive struggling local economies B. The expansion of service offerings by nonbank financial institutions C. The belief among regulators that larger firms may be more efficient and stable D. Advances in technology which allowed banks to service customers in broader geographic areas E. All the options are reasons for the passage of interstate banking laws

Q: A bank which offers its full range of services from only one office is known as a: A. unit bank. B. branch bank. C. correspondent bank. D. bank holding company. E. None of the options are correct.

Q: Which of the following is a type of nonbank businesses a bank holding company can own? A. Retail Computer Store B. Security Brokerage Firm C. Retail Grocery Store D. Wholesale Electronic Distribution Company E. All the options are correct

Q: Which of the following is considered to be an advantage of branch banking? A. Increased availability and convenience of services B. Decreased chance of failure C. Reduced transaction costs D. Decreased chance of failure and reduced transaction costs E. All the options are correct

Q: A company which owns stocks of three different banks is categorized as a(n): A. unit bank. B. interstate bank. C. investment bank. D. multi-bank holding company. E. None of the options are correct.

Q: Which of the following is one of the several advantages that bank holding company organizations have over other types of banking organizations? A. Greater access to capital markets B. Tax advantage C. Product-line diversification D. Ability to use higher leverage E. All the options are correct

Q: The concentration of U.S. bank deposits in the hands of the largest banks has _________ recently. A. declined B. increased C. remained essentially unchanged D. exhibited large fluctuations in both directions E. None of the options are correct

Q: Which of the following is one of the few states that has opted out of interstate banking? A. New York B. Ohio C. Texas D. Montana E. None of the options are correct

Q: A typical branch banking organization: A. has complete centralization of authority. B. has complete decentralization of authority. C. has partial decentralization of authority. D. is completely operated by regulators. E. is completely operated by shareholders.

Q: Before offering any financial service to the public, a bank in the United States must have a: A. certificate of deposit insurance. B. charter of incorporation. C. list of established customers. D. new building constructed to be the bank's permanent home. E. None of the options are correct.

Q: According to the textbook, large banks possess some potential advantages over small and medium-size banks. Which of the following is not such an advantage? A. Greater diversification, geographically and by product line B. Availability of financial capital at lower cost C. Greater professional expertise to allocate capital to the most promising products and services D. Better positioned to take advantage of the opportunities afforded by interstate banking E. All the options are advantages typically possessed by large banks

Q: Which of the following is charged with setting policies and overseeing the performance of a bank? A. Stockholders B. Board of directors C. Regulators D. Depositors E. None of the options are correct

Q: 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. A. bank size B. management's decision C. function D. regulation E. location

Q: X-efficiency is a concept which measures the divergence between the actual operating costs and the lowest possible operating costs of a financial services firm if it is operating under maximum efficiency.

Q: Community banks are usually smaller banks that are devoted principally to the markets for smaller, local deposits and loans.

Q: Traditional brick-and-mortar bank branch offices are on the decline in the U.S. today.

Q: There are only a very small number of unit banks in the U.S. today.

Q: Bank organizational structure has become more complex in recent years.

Q: Banks acquired by holding companies are referred to as affiliated banks.

Q: Banks which operate entirely on the web are known as invisible banks.

Q: Banks tend to have a higher proportion of outside directors than a typical manufacturing firm.

Q: Bank holding companies are allowed to own nonbank businesses as long as those businesses offer services closely related to banking.

Q: Bank holding companies that want to achieve some reduction in earnings risk through interstate banking, can achieve the same level of risk reduction by entering any of the fifty states.

Q: Recent research suggests that the relationship between bank size and the cost of production per unit of output is roughly U shaped.

Q: Agency theory suggests that bank management will always pursue the goal of maximizing returns of the bank's shareholders.

Q: Less than 10 percent of the largest banks in the U.S. control almost 90 percent of the industry assets.

Q: Recent research suggests that branch banks tend to be more profitable than either unit or holding company banks, while interstate banks tend to be the most profitable of all.

Q: A unit branch faces the risk of variability in earnings if the surrounding economy weakens and people and businesses move away to other market areas.

Q: There is evidence that branch banks charge higher service fees for some banking services than unit banks, which reflects greater knowledge on the part of larger banks concerning true cost of service.

Q: The concentration of bank deposits at the local level (that is in urban communities and rural counties) has displayed only moderate changes in recent years.

Q: Research evidence suggests that banks taken over by interstate banking organizations have generally increased their market share over their competitors within the same state and are generally more profitable than their competitors.

Q: Financial holding companies hold more than 90 percent of the industry's assets in the United States.

Q: In the United States there are more one-bank holding companies than multi-bank holding companies.

Q: Despite the rapid growth of automation in U.S. banking, there are more full-service branch banking offices than automated teller machines across the whole U.S.

Q: An average U.S. bank is larger in size (in terms of number of branch offices) than an average Canadian bank.

Q: Over half of all U.S. states today limit branching activity.

Q: A banking corporation, chartered by either federal or state governments, that operates only one full-service office is called a unit bank.

Q: The majority of all U.S. banks are members of the Federal Reserve System.

Q: State-chartered banks in the United States represent about a quarter of all U.S.-chartered banks, while national banks account for approximately three quarters of all U.S. chartered banks.

Q: Nearly all U.S. banks with federal or state charters have their deposits insured by the Federal Deposit Insurance Corporation.

Q: Nearly three quarters of all U.S. banks exceed $100 million in asset size apiece.

Q: Bank size is not considered a significant factor in determining how banks are organized.

Q: ___________________ is the committee selected by stockholders to set policies and monitor the performance of a bank.

Q: ______________________ is the idea that cost of producing multiple services, using the same organization and resources, will grow at a lower rate as the product mix expands.

Q: ___________________________ is the idea that as the output grows, cost of production per unit of goods and services will grow at a lower rate.

Q: Many experts believe that lower agency costs and better company performance depend upon the effectiveness of ____________ the relationship that exists among managers, the board of directors, stockholders, and other stakeholders.

Q: ___________________ is a larger view of how modern corporations operate, and analyzes the relationship between a firm's owners and its managers.