Accounting Multiple Choice Questions

Multiple choice: Answer all questions on this page at the bottom in the space provided (3 points each)
4.The modern bank has had to adopt many roles to remain competitive and respond to public needs. They include the following except:
* Printing bank notes
* Carry out payments for goods and services on behalf of customers
* Safeguarding a customer’s valuables
* Acting on behalf of customers to manage and protect their property
5.Which of the following is not a trend affecting banks and other financial service firms today?
* Globalization
* Consolidation and geographic expansion
* Lack of interest rate sensitivity
* Government deregulation
6.The Financial Services Modernization Act resulted in:
* Formation of Financial Holding Companies
* Increased FDIC insurance to $250,000 per customer per account
* Expansion of branches across state lines
* Increased use of technology by financial institutions
7.A money-center bank in the US with over $50 billion dollar in assets is generally structured as a:
* Virtual bank
* Financial Holding company
* Wholesale bank
* Retail bank
8.Which of the following is a true statement of those that opposed interstate banking:
* Regulators who were against banks offering investment banking and insurance products
* Increased number of mid-size banks
* Drain deposit funds from the community and invest elsewhere
* Lower prices for products and services
9.All banks in the US that are FDIC-insured:
* Are all national bank chartered and none are state chartered
* Can borrow from the central bank
* Can insure bank deposits
* Can insure investable funds
10.A bank that has a higher equity multiplier:
* Is less likely to fail during economic downturn
* Will tend to have higher liabilities
* Is more likely to have lower liabilities
* Is more likely to have a higher equity ratio
11.The probability that some of the financial firm’s assets will decline in value and perhaps become worthless is known as:
* Liquidity risk
* Credit risk
* Capital risk
* Interest rate risk
12.The largest category of liabilities for a bank is:
* Investment in securities
* Loans
* Deposits
* Both a and b
13.Unit Banking Organizations today represent:
* The largest number of Bank Holding Companies
* Most state-chartered banks
* Most competitive Banking companies in the world
* None of the above
14.Economy of scale means:
* Greater efficiencies due to offering multiple products rather than just turning out one service
* Growing market share by increasing number of branches
* Greater efficiencies using the firm’s resources to produce multiple units of the same service
* Offering on-line banking services
15.A bank can increase its ROE by:
* Paying high dividends to its shareholders to increase their return
* Managing what sources of funding should be used
* Competing with other banks by lowering the pricing of services and rely on higher volume
* All of th...