Chapter 1

Under the Bank Holding Company Act control of a bank is assumed to exist only if:

• The bank holding company acquires 100% of the bank’s stock

• The bank holding company acquires 50% or more of the bank’s stock

• The bank holding company acquires 25% or more the bank’s stock

• None of the above

Bank equipment leasing activity involves:

• A bank leasing its office facilities instead of buying

• A bank buying equipment and then leasing the item to a customer

• A customer buying equipment and then leasing it to a bank

• A bank leasing computer equipment

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

Banks perform the indispensable task of:

• Creating money without making loan.

• Absorbing the excess liquidity created by other financial institutions

• Intermediating between surplus-spending individuals or institutions and deficit-spending individuals or institutions

• Issuing risky deposits

Nam goes to his local bank to get help developing a financial plan and making investment decisions. Which of the more recent services banks offer is Nam taking advantage of?

• Getting a consumer loan

• Getting financial advice

• Managing cash

• Getting venture capital services

A study of history shows that one of the first services offered by banks was:

• Equipment Leasing

• Currency Exchange

• Security Brokerage and Underwriting

• Sale of Real Estate

Quang has an account in a bank that does not have a physical branch. He does all of his banking business over the internet. What type of bank does he have his account at?

• Virtual Bank

• Mortgage Bank

• Community Bank

• Affiliated Bank

What is a bank holding company?

• It is a bank that offers all of its services out of one office

• It is a bank that offers all its services out of several offices

• It is a corporation formed to hold the stock of one or more banks

• It is a merchant bank

Which of the following has been an important trend regarding consolidation and geographic expansion in banks?

• Increased bank branching activity

• The formation of more holding companies to purchase smaller banks

• Mergers among some of the largest banks in the industry

• A and C above

• All of the above.

A financial holding companies (FHC), defined as a special type of holding company that may offer the broadest range of financial services such as securities and insurance activities, were allowed under which act?

• Riegle-Neal Interstate Banking and Branching Efficiency Act

• The Competitive Equality in Banking Act

• The Basel Agreement

• The Gramm-Leach-Bliley Financial Services Modernization Act