Question 1   Multiple Choice (1.0000 points)
  Question: The Glass-Steagall Act of 1933 accomplished which of the following?
    It created the F.D.I.C.
It slowed the spread of banking panics that were common in the early 1930s.
It separated commercial banking from investment banking.
It prohibited banks from purchasing securities they were unable to sell to the public.
All of the above

Question 2   Multiple Choice (1.0000 points)
  Question: Which of the following were reasons why commercial banks experienced difficulties in the 1970s?
    Falling market interest rates
Competition from other financial institutions - especially mutual funds
The repeal of Regulation Q
The election of a liberal president, Jimmy Carter
A severe stock market crash

Question 3   Multiple Choice (1.0000 points)
  Question: Bank branching restrictions:
    Were most restrictive in eastern states.
Were enacted largely because of a fear that large banks would not serve communities as well as small, local banks.
Were strengthened by the McFagan Act of 1927.
Have been tightened considerably since the 1970s.
Are expected to be expanded shortly.

Question 4   Multiple Choice (1.0000 points)
  Question: Commercial bank assets include:
    Demand deposits.
Bank capital.
Saving deposits.
Notes payable.

Question 5   Multiple Choice (1.0000 points)
  Question: Federal Reserve regulations prohibit banks from:
    Selling insurance.
Processing international transactions.
Managing finances for their clients.
Marketing mutual funds.
Extending loans to people who have filed for bankruptcy.

Question 6   Multiple Choice (1.0000 points)
  Question: Which of the following contributed to the thrift crisis of the 1980s?
    A decrease in market interest rates in the late 1970s
The fact that the assets of the average thrift had the same maturity as its liabilities
The demise of money market mutual funds in 1980
A declining reliance on brokered deposits
Government-sponsored deposit insurance

Question 7   Multiple Choice (1.0000 points)
  Question: The principal lesson provided by the thrift crisis is:
    Never deposit funds in an S&L that does not offer deposit insurance.
Severing the direct relationship between risk and return may lead to problems in financial markets.
Thrift operators seldom get any benefit from making campaign contributions to influential senators.
Federal deposit insurance was the only successful aspect of the government's involvement with thrifts and for this reason, it should never be reformed.
Insured depositors are always the best monitors of bank risk.

Question 8   Multiple Choice (1.0000 points)
  Question: The oldest form of insurance is:
    Life insurance.
Marine insurance.
Deposit insurance.
Homeowner's insurance.
Auto insurance.

Question 9   Multiple Choice (1.0000 points)
  Question: The difference between a market order and a limit order is:
    Market orders are for shares of stock traded on the NYSE; limit orders are processed only by NASDAQ dealers.
Limit orders specify the minimum price investors will pay for a security.
Limit orders are insured against broker fraud.
Market orders do not specify the price an investor is willing to pay for securities.
Limit orders are riskier to the investor than market orders.

Question 10   Multiple Choice (1.0000 points)
  Question: Closed-end funds:
    Accept money from new investors at any time.
May be valued above or below the aggregate market value of the securities it holds.
Sell shares only to other financial institutions.
Offer a variable number of shares of itself to investors.
Are more popular than open-end funds.