Question 1

The business that collects premiums and then provides long-term financing for large real estate projects is a(n)

Accepted Answer

A)   commercial bank.
B)   credit union.
C)   mutual savings bank.
D)   Federal Reserve Bank.
E)   insurance company.F) B) and D)
G) A) and D)

Question 2

For customers who do their banking solely online, the largest disadvantage is the increased security threat.

Accepted Answer

A) True 
 B)False

Question 3

A loan that is approved before the money is actually needed is called a(n)

Accepted Answer

A)   collateral loan.
B)   mortgage.
C)   amortisation.
D)   security note.
E)   line of credit.F) B) and C)
G) A) and B)

Question 4

To protect consumers in case the bank makes an error or the customer's account information is stolen, Congress passed the

Accepted Answer

A)   Truth-in-Banking Act.
B)   Banking Regulation No.204.
C)   Security Protection Act.
D)   Electronic Funds Transfer Act.
E)   Financial Securities Act.F) A) and B)
G) B) and C)

Question 5

The usual passbook savings account at a commercial bank earns

Accepted Answer

A)   between 0.10 and 0.90 percent.
B)   about 1.5 percent.
C)   between 1.5 and 5.0 percent.
D)   a rate that is adjusted annually.
E)   a rate that is adjusted every two years.F) B) and C)
G) B) and D)

Question 6

Demand deposits are called near-monies.

Accepted Answer

A) True 
 B)False

Question 7

Maya Michey graduated from college and is seeking employment in the banking industry.She believes she has what it takes to be successful because she

Accepted Answer

A)   is driven to earn a big salary.
B)   is looking for an easy job.
C)   is honest and likes to interact with people.
D)   doesn't want to work long hours.
E)   knows a lot of employees at local banks.F) All of the above
G) B) and C)

Question 8

Bob Jones believes that some information in his credit file is inaccurate.Therefore, he

Accepted Answer

A)   cannot make corrections or give explanations.
B)   can write a brief explanation giving his side of the dispute.
C)   has the right to request that the creditor discard the information.
D)   has the right to use correction fluid to erase it from his file.
E)   has the right to request that the credit bureau verify it.F) A) and B)
G) C) and D)

Question 9

Depositors are penalised for early withdrawal of funds from

Accepted Answer

A)   demand deposits.
B)   certificates of deposit.
C)   lines of credit.
D)   notes payable.
E)   None of these answers is correct.F) B) and C)
G) A) and D)

Question 10

Which of the following is not an upcoming change within the banking industry that experts tend to agree upon?

Accepted Answer

A)   Decreased use of credit and debit cards
B)   Additional emphasis on evaluating creditworthiness of applicants
C)   Government regulation increases
D)   Reduction of the number of banks, S&Ls, and credit unions
E)   Continued online banking growthF) B) and E)
G) B) and C)

Question 11

The percentage of deposits that a bank must retain for depositors is called

Accepted Answer

A)   the demand deposit.
B)   a trust fund.
C)   amortisation.
D)   collateral.
E)   a reserve requirement.F) A) and E)
G) A) and C)

Question 12

Collateral is real estate, stocks, bonds, equipment, or any other asset of value pledged as security for a loan.

Accepted Answer

A) True 
 B)False

Question 13

Most of the secretaries at Bingham Insurance Company like to see their paychecks, but not Cynthia Woodward.She signed a special form giving the company permission to transfer her salary directly to her bank account.Companies like Bingham are able to do this through

Accepted Answer

A)   electronic teller machines.
B)   automated clearinghouses.
C)   automated teller machines.
D)   point-of sale terminals.
E)   bill payments by telephone.F) A) and E)
G) C) and E)

Question 14

All of the following are developments in electronic banking except

Accepted Answer

A)   POS terminals.
B)   ATMs.
C)   ACHs.
D)   drive-through banking.
E)   ECC.F) B) and E)
G) D) and E)

Question 15

Usually money is used as a

Accepted Answer

A)   store of wealth.
B)   means of payment.
C)   medium of exchange.
D)   measure of value.
E)   All are acceptable uses of money.F) A) and E)
G) B) and C)

Question 16

In many stores in Canada, U.S.currency is accepted for payment because the retailers know that their suppliers and other customers will also accept it.In this example, money serves as a

Accepted Answer

A)   medium of exchange.
B)   measure of exchange.
C)   store of value.
D)   foreign exchange currency.
E)   measure of value.F) A) and D)
G) A) and C)

Question 17

The Credit Card Act is credited with leveling the playing field between credit card customers and financial institutions that issue the cards.Which of the following is not provided for in the act?

Accepted Answer

A)   Requires that credit card companies offer an obligatory five day grace period for late payments
B)   Encourages disclosures written in plain language
C)   Increases protection for students and people under 21 years of age
D)   Requires a 45-day notice before existing rates are changed
E)   Requires that all fees be necessary and reasonableF) A) and B)
G) A) and C)

Question 18

Walter Manufacturing Company needs to obtain appropriate financing for plant expansion.You would recommend a

Accepted Answer

A)   short-term loan.
B)   line of credit.
C)   revolving credit agreement.
D)   long-term business loan.
E)   one-year loan.F) All of the above
G) A) and D)

Question 19

At the bank where Natasha works, loans are made on the money that customers deposit and then in turn on what borrowers deposit, which allows the bank to make more loans.This is referred to as

Accepted Answer

A)   reserve requirements.
B)   duplicate lending.
C)   open-market operations.
D)   margin lending.
E)   deposit expansion.F) B) and E)
G) A) and C)

Question 20

Anything used by a society to purchase products and services or resources is called

Accepted Answer

A)   money.
B)   barter.
C)   capital.
D)   cash.
E)   funds.F) B) and D)
G) B) and E)

Exam 17: Money and the Banking System

The percentage of deposits that a bank must retain for depositors is called

Correct AnswerverifiedShow Answer

Which of the following is not an upcoming change within the banking industry that experts tend to agree upon?

Correct AnswerverifiedShow Answer

Depositors are penalised for early withdrawal of funds from

Correct AnswerverifiedShow Answer

The business that collects premiums and then provides long-term financing for large real estate projects is a(n)

Correct AnswerverifiedShow Answer

For customers who do their banking solely online, the largest disadvantage is the increased security threat.

Correct AnswerverifiedShow Answer

Usually money is used as a

Correct AnswerverifiedShow Answer

At the bank where Natasha works, loans are made on the money that customers deposit and then in turn on what borrowers deposit, which allows the bank to make more loans.This is referred to as

Correct AnswerverifiedShow Answer

Most of the secretaries at Bingham Insurance Company like to see their paychecks, but not Cynthia Woodward.She signed a special form giving the company permission to transfer her salary directly to her bank account.Companies like Bingham are able to do this through

Correct AnswerverifiedShow Answer

Demand deposits are called near-monies.

Correct AnswerverifiedShow Answer

Walter Manufacturing Company needs to obtain appropriate financing for plant expansion.You would recommend a

Correct AnswerverifiedShow Answer

Bob Jones believes that some information in his credit file is inaccurate.Therefore, he

Correct AnswerverifiedShow Answer

Maya Michey graduated from college and is seeking employment in the banking industry.She believes she has what it takes to be successful because she

Correct AnswerverifiedShow Answer

To protect consumers in case the bank makes an error or the customer's account information is stolen, Congress passed the

Correct AnswerverifiedShow Answer

The Credit Card Act is credited with leveling the playing field between credit card customers and financial institutions that issue the cards.Which of the following is not provided for in the act?

Correct AnswerverifiedShow Answer

All of the following are developments in electronic banking except

Correct AnswerverifiedShow Answer

A loan that is approved before the money is actually needed is called a(n)

Correct AnswerverifiedShow Answer

The usual passbook savings account at a commercial bank earns

Correct AnswerverifiedShow Answer

Anything used by a society to purchase products and services or resources is called

Correct AnswerverifiedShow Answer

In many stores in Canada, U.S.currency is accepted for payment because the retailers know that their suppliers and other customers will also accept it.In this example, money serves as a

Correct AnswerverifiedShow Answer

Collateral is real estate, stocks, bonds, equipment, or any other asset of value pledged as security for a loan.

Correct AnswerverifiedShow Answer

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