Question

1.   When John Doe opened an account that allows him to write checks to pay for his groceries and other purchases, the bank is providing the service of:

A) Currency exchange

B) Discounting commercial notes

C) Safekeeping of valuables

D) Offering demand deposits

QUESTION 15

1.   Which of the following would be the most important consideration for locating a new

branch bank?

A) Large populations of above average age

B) Few shops and a rural farm setting

C) A rapidly increasing number of facilities operated by competitors

D) Below average population density

QUESTION 13

1.   There are several reasons that banks are regulated. If you are worried that you might not get a loan from the National Bank of South Carolina because of the way you look, which reason for regulating banks might this be an example of?

A) To protect the safety of the public’s savings

B) To control the supply of money and credit

C) To ensure equal opportunity and fairness in the public’s access to credit

D) To avoid concentration of power in the hands of a few individuals and institutions

QUESTION 10

1.   First federal decides to make a home mortgage to one of its clients. Which account on the balance sheet would this mortgage be included in?

A) Cash and Due from Depository Institutions

B) Investment Securities

C) Trading Account Assets

D) Gross Loans

5 points  

QUESTION 6

1.   Which of the following is not a guideline for liquidity managers of banks?

A) The liquidity manager must only keep track of the activities of some and not all departments of the bank

B) The liquidity manager must know in advance (if possible) the plans of major creditors and depositors

C) The liquidity manager should make sure the bank has clear priorities and objectives for liquidity management

D) The liquidity manager must analyze the liquidity needs of the bank on a

continuous basis

Answer 1

As per rules I am answering the first 4 subparts of the question

1D

(Writing checks means that money will be offered against the check. Hence it is a demand deposit facility provided to the customers. The other options do not relate to checks)

15: 1 A

Having a large population in the area will bring in more customers for the banks.

A few shops and rural farm setting will keep banking business low. Higher competitor presence is also not good for customer business. Below average population also affects the business of the bank.

13: C

Regulating banks to ensure fairness in dealings will ensure that all people get equal opportunities for getting bank credit. Other options do not ensure fairness for all.

14: D

The home mortgages to individuals will be included in gross loans.

Cash and Due from Depository Institutions includes amounts due from institutions and not individuals. Investment securities and trading assets include current tradeable assets.