Which of the following would generally be considered the riskiest investment? a. U.S. government bonds b. certificates of deposit from your local bank c. corporate stocks d. all of the above are considered high risk | Homework.Study.com (2024)

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• Which of the following securities are banks not allowed to hold? a) high-rated corporate bonds b) stocks c) municipal bonds d) Treasury bonds
• Which of the following bonds has the greatest credit risk? a) AAA-rated municipal bonds b) corporate bonds issued by Apple Corp c) US government bonds d) junk bonds
• Which of the following are reported as assets on a bank's balance sheet? A. mortgages B. savings deposits C. U.S. government securities D. both a and c. E. all of the above.
• Which investment type typically carries the least risk? a. Mutual funds b. Treasury bonds c. Savings account d. Individual stocks
• The default risk associated with securities is measured against a "benchmark"; securities that are considered risk-free. What are those securities? a. municipal bonds b. Federal Reserve notes c. gold d. U.S. Government securities
• Which of the following is not an example of a bank asset? a. Government bonds. b. Checkable deposits. c. Commercial loans. d. Reserves.
• Which of the following has been a problem faced by the FDIC in its provision of federal deposit insurance? a. moral hazard arising from the tendency for the highest-risk banks to be those most interes
• The default risk associated with securities is measured against a "benchmark," securities that are considered risk-free. What are those securities? a. gold b. municipal bonds c. Federal Reserve notes d. U.S. government securities
• Which of the following is a financial intermediary? a. A mutual fund, b. The stock market, c. A U.S. government bond, d. None of the above.
• Which of the following is not a source of funds for commercial banks? a) Non-deposit Borrowing, b) Savings Deposits, c) Treasury Securities, d) Bank Capital (net worth).
• Which of the following are assets of the Fed? a) bank reserves b) coins c) government bonds
• To reduce risk-taking, U.S. bank regulators: e) Require banks to hold substantial capital, b) Subject banks to annual financial examinations, c) Prohibit banks from investing in corporate stock, d) All of the above.
• Which of the following involves financial intermediation? a. a bank makes a loan b. a household buys stock issued by a corporation c. a foreign government purchases U.S. government bonds d. all of the above are correct
• Which of the following is not a typical commercial bank liability? A. demand deposits B. certificates of deposit C. money market deposit accounts D. commercial loans E. federal funds purchased
• Which of the following is not a bank liability? \\ A. checkable deposits B. CDs C. mortgage loans D. borrowings from the Federal Reserve
• Which of the following types of investments is best for money you may need in an emergency? a. government bonds b. real estate c. money markets d. individual stocks e. corporate bonds A bond's i
• Which of the following is classified as investment in national income (GDP) accounting? a. building a new factory. b. depositing money in a bank. c. purchasing corporate stocks and bonds. d. buying a 10-year-old house.
• Which of the following U.S. Treasury securities represents ownership of the national debt? a. Bonds owned by the banks and insurance companies b. Bonds owned by the Social Security Administration c. Bonds owned by private individuals d. All of the abo
• What is true about credit unions? a. They are not insured by the government. b. They are generally member-owned. c. They only offer savings accounts. d. All of the above are true.
• Which of the following is a debt management service offered by commercial banks? A. Leasing B. Factoring C. Brokerage D. Safe keeping
• Which of the following is not a source of deposits for the eurocurrency market? A. small companies, banks, and governments B. extremely wealthy individuals C. international companies with excess cash D. commercial banks with large deposits E. governments
• Which of the following is not considered an asset for a bank: a. Customer deposits. b. U.S. government treasury bills. c. Corporate loans. d. U.S. government issued debt.
• Which of the following is not an interest bearing asset of commercial banks? a. Required reserves b. Securities c. Loans d. All of the above are interest bearing assets of commercial banks.
• Which of the following would be classified as a liability for a bank? A) Checkable deposits. B) Loans. C) Required reserves. D) Excess Reserves.
• Which of the following is a bank asset? a) Demand deposits, b) Savings account deposits, c) Certificates of deposit held by the public, d) Loans made to customers.
• A bank manager has which of the following concerns? a. to acquire funds at low cost b. to have enough ready cash to meet deposit outflows c. to minimize risk by diversifying asset holdings d. all of the above
• Which of the following is not a primary financial intermediary in the U.S.? Select one or more: a. Banks b. Stock Market c. Government d. Bond Market
• Which one of the following is not a depository institution? a. Commercial bank b. Savings and loan association c. Credit union d. All of the above e. None of the above
• Which of the following entries would appear on the liabilities side of the Federal Reserve's balance sheet? A. U.S. government securities B. member banks' reserve deposits C. loans to commercial banks
• Which of the following count as legal reserves? A) Vault cash. B) Account balances at the federal reserve banks. C) U.S. treasury securities. D) Both A and B. E) All of the above.
• Explain which of the following are counted as part of the money supply (M1): a. Checking account deposits b. Stocks c. Savings account deposits d. Government bonds
• Which of the following are reasons that banks are so heavily regulated? a. Governments are concerned about the safety of deposits. b. The industry is a principal determinant of aggregate demand. c. Bank failures are contagious. d. All of the above are
• Which of the following is a checkable deposit? \\ A. a NOW account B. a money market deposit account C. a certificate of deposit D. a savings account
• Which of the following is true? a. Certificates of deposit are not considered transaction accounts because they are not accepted as payment for goods and services. b. Certificates of deposit are not considered transaction accounts because the FDIC does no
• A bank can decrease the degree of moral hazard if it: a) places covenants on the loan b) monitors the borrowers behavior c) both of the above d) none of the above
• Which of the following are included in the narrowest definition of the money supply? A) cash in bank vaults B) savings deposits C) money market mutual fund accounts D) negotiable certificates of deposit E) checkable deposits
• The risk free interest rate is determined primarily by the : a) Largest commercial bank b) Internal Revenue Service c) U.S. Treasury d) Federal Reserve
• Which one of the following statements about corporate bonds is correct? A. Corporate bonds are also known as stocks. B. Corporate bonds are promises by a corporation to repay a loan. C. Corporate bonds are illegal in the United States. D. Corporate bonds
• Which of the following is not a source of funds for commercial banks? A. Borrowing from the Fed B. Treasury Securities C. Checkable Deposits D. Bank Capital (net worth) E. None of the above; they are all sources of funds for banks.
• Which of the following is most liquid? a. short-term government bonds b. savings accounts c. checking accounts d. currency and coins
• Which of the following is not a form of finance for poor and middle-income countries that want to borrow in international capital markets? a. Foreign direct investments. b. Bonds issued by the government or private sectors. c. Loans from commercial banks.
• Which of the following are reported as liabilities on a bank's balance sheet: a) Discount loans, b) Reserves, c) U.S. Treasury securities, d) Real estate loans.
• A bank run is an extreme form of: a) credit risk. b) interest rate risk. c) low bank esteem. d) liquidity risk.
• Which of the following is true about the Federal Reserve System (Fed)? a. It is a system of 12 central banks. b. Its Board of Governors is elected by a vote of the people. c. Its main policy-making body is the FDIC. d. It accepts deposits from the public
• Included in the official U.S. money supply are: a. U. S. government bonds. b. corporate stocks. c. checkable deposits. d. All of these.
• Which of the following is a store of value? (a) Treasury bonds (b) Gold (c) Currency (d) All of the above.
• Which of the following are assets of the Fed? a) bank reserves b) coins c) government bonds d) federal reserve notes
• Which of the following is the government regulator for all securities firms operating in the United States? a. Federal Trade Commission b. Federal Deposit Insurance Corporation c. Federal Reserve Board d. Financial Industry Regulatory Authority
• Which of the following are considered examples of direct finance? Choose one or more: A. Apple stocks B. Microsoft bonds C. A savings account in Citibank
• Which of the following is an example of an economic investment? a. Putting money in a bank CD. b. Buying a corporate bond or stock. c. Building a new bank office. d. Purchasing shares of a mutual fund.
• Which of the following are examples of financial assets that pay a short term interest rate? a.Saving deposits and checking accounts b.Mortgages and government bonds c.Stocks and home loans d.Trea
• Which of the following owns a portion of the national debt? a. federal, state, and local governments b. private U.S. citizens c. banks d. foreigners e. all of the above
• Which of the following is not a liability found on the balance sheet of a commercial bank: T-Bills, savings deposits or borrowing from the FED? Explain.
• Which of the following accepts deposits from its account holders? a) Depository institution b) Fly by night institution c) Non-institutional lender d) None of the above
• Suppose you go to your local bank, intending to buy a certificate of deposit with your savings. Explain why you would prefer to offering a loan, at an interest rate that is higher than the rate the bank pays on the certificate of deposit (but lower than t
• Could the actions of the Federal Reserve and Treasury be viewed as a moral hazard problem? a) Yes, financial firms such as Bear Stearns may continue taking on riskier investments because they believe a federal bailout is likely. b) Uncertain, if the act
• Which of the following is the most liquid? a. checkable and debitable accounts b. stocks and bonds c. cash d.certificate of deposit
• What type of account does the Federal Deposit Insurance Corporation (FDIC) insure?
• Which of the following items is included in M2? A. credit cards B. money market mutual funds C. corporate bonds D. large time deposits
• Which of the following can be controlled by the Federal Reserve System? a.the federal funds rate. b.the total supply of money. c.either one of the above but not both together. d.none of the above.
• Which of the following institutions does not provide checkable-deposit services to the general public? a. Commercial banks, b. Savings and loan associations, c. U.S. Treasury, d. Credit unions.
• Which of the following options is correct? A fractional reserve banking system is one in which banks hold less than 100 percent of in reserves. a. deposits b. securities c. loans d. shareholder equity
• Which banks must be insured by the FDIC? Which banks can choose not to be insured by the FDIC?
• The goal of a commercial bank is to: (a) establish good regulations for commercial activities. (b) make only safe, no-risk loans. (c) maximize its stockholders' wealth. (d) minimize its taxes paid to state governments. (e) accept only deposits made i
• Which of the following statements about national banks is false? A) They are insured by the FDIC. B) They must join the Federal Reserve. C) They are regulated by a federal agency. D) They are owned and managed by the U.S. government.
• Federal Reserve Banks fund their operations through: A. fees charged to banks that use their services B. interest on the securities they own C. government tax revenue D. dividends paid by local banks E. A and B
• Which two of the following financial institutions offer checkable deposits included within the M1 money supply: mutual fund companies; insurance companies; commercial banks; securities firms; thrift institutions? Which of the following items is not includ
• A bank currently has $70,000 in deposits, $6,000 in cash in the vault, $12,000 on deposit with the Fed, and $7,000 in government securities. The required reserve ratio is 20%. a.What is the maximum a
• Which of the following agencies is owned by the U.S. government? a. Fannie Mae, b. Freddie Mac, c. Both of the above, d. None of the above.
• The market in which bonds are issued and actions is known as the market: a) bonds b) capital c) federal funds d) money
• Which of the following are financial markets? a. Banks and Mutual Funds b. Banks and Stock Market c. Bonds Market and Stock Market d. Bonds Market and Mutual Funds
• Which of the following federal agencies is not engaged in economic regulation? a. Federal Deposit Insurance Corporation (FDIC) b. Federal Aviation Administration (FAA) c. the Federal Reserve (Fed) d. Environmental Protection Agency (EPA)
• Which of the following is counted as an investment in national income accounting? a) Building a new factory. b) Buying an existing house. c) Purchasing corporate stocks and bonds. d) Depositing money in a commercial bank.
• a) Suppose a certain bank has $5M in the capital, demand deposits totaling $40M, holds 15% reserves, and invests solely in high-risk loans. Sketch out this bank's balance sheet. b) Now suppose that 10% of the loans completely default. What does this bank
• To reduce risk-taking, US bank regulators (a) require banks to hold substantial capital (b) subject banks to annual financial examinations (c) prohibit banks from investing in corporate stock (d) all of the above
• Which of the following is a store of value? (i) currency (ii) US government bonds (iii) fine art (iv) all of the above
• In the US, what is the largest source of funds for business? a) stock issues b) bonds c) loans from financial institutions d) government loans
• Which of the following is NOT part of the U.S. money stock (supply)? a. coins. b. bonds. c. checkable deposits. d. paper currency.
• Which of the following was not the result of the repeal of the Glass-Steagall act in 1999? a. Banks were permitted to affiliate with insurance underwriters. b. Commercial banks were allowed to hold a range of securities other than government bonds, which
• Identify which of the following situations currently faced by the World Bank or the International Monetary Fund are examples of adverse selection and which are examples of moral hazard. a. The World Bank has extended loans to the government of a develop
• Given the danger of bank runs, why do banks not keep the majority of deposits on hand to meet the demands of depositors?
• Which of the following is a primary responsibility of the federal reserve bank? (i) Tax collection. (ii) Setting up the federal budget. (iii) Establishing monetary policy. (iv) All of the above.
• In economics, which of the following is considered as financial capital? (a) Offices and warehouses (b) Factories (c) Stocks and bonds (d) Equipment (e) Machinery
• The Fed pays very high interest rates on which of the following assets and/or liabilities? A. Securities owned by the Fed B. Bank deposits deposited with the Fed C. None of these choices D. Discount l
• What is the primary source of funds for commercial banks? Why have banks been losing cost advantages in acquiring funds in recent years?
• What actions should the Federal Reserve take to lower the 'federal funds interest rate'?
• Explain theoretically what happens to i in the liquidity preference framework when bonds become risky?
• Which of the following is the most liquid of a bank's assets? A. short-term business loans B. securities C. long-term business loans D. cash
• 1.You just received a bonus at your job of $4,000 which you decide to put in a savings account at the local bank. Assume that banks lend out all excess reserves and there are no leaks in the banking
• Which regulatory agency has the primary responsibility for supervising the following categories of commercial banks? National banks. Bank holding companies. Non-Federal Reserve member state banks. Federal Reserve member state banks. Federally chartered
• Which of the following accounts will give you the least access to your money? a. simple savings account b. certificate of deposit (CD) c. checking account d. cash
• Which of the following assets is the most liquid? a. stocks b. currency c. checkable bank deposits d. money market mutual funds
• which of the following is part of the m1 money stock? a. large denomination certificates of deposits. b. credit card account balances c. checkable deposits
• Which of the following insures the value of the U.S. dollar? A. The euro and other foreign currencies held by the Federal Reserve B. Gold bars in secure locations like Fort Knox C. The promise of the U.S. government to maintain its value D. The value of t
• I.) Which of the following describe a common cause of bank panics? Check all that apply. A. Bank regulators are bureaucrats who do not keep up with real-world banking issues. B. Bank executives are not trained in risk management. C. Rumors that a bank
• Which of the following is not a type of negotiable instrument? a. Promissory Note b. Draft c. Stock Certificate d. Certificate of Deposit
• A bank's capital helps the bank deal with which of the following? A. sudden drops in the value of their liabilities B. an unexpected decrease in asset value C. liquidity risk D. sovereignty risk
• Which of the following is not an interest-bearing asset of commercial banks?
• Which of the following is the correct option? The actual reason that banks must hold required reserves is a. To enhance liquidity and deter bank runs. b. To help fund the Federal Deposit Insurance Cor