Banking and Financial Services
Final Exam
Course Introduction
This course provides an in-depth exploration of the structure, functions, and evolution of banking and financial services in modern economies. Students will learn about various types of financial institutions, their roles in facilitating the flow of funds, and the range of services they offer, such as loans, deposits, investment products, and payment systems. The course examines core concepts including risk management, regulatory frameworks, financial intermediation, and the impact of technological innovations on the financial sector. Emphasis is also placed on ethical considerations, consumer protection, and current trends shaping global banking and financial services.
Recommended Textbook
MandB 3 3rd Edition by Dean Croushore
Available Study Resources on Quizplus
18 Chapters
1203 Verified Questions
1203 Flashcards
Source URL: https://quizplus.com/study-set/3630 Page 2
Chapter 1: Money and the Financial System
Available Study Resources on Quizplus for this Chatper
17 Verified Questions
17 Flashcards
Source URL: https://quizplus.com/quiz/72085
Sample Questions
Q1) Which policymaking institution determines the money supply, sets the rules for how checks are cleared and how banks obtain new currency, and determines what activities banks may or may not engage in?
A)Treasury Department.
B)Commerce Department.
C)Securities and Exchange Commission.
D)Federal Reserve System.
Answer: D
Q2) The percentage by which real gross domestic product is above or below its potential level is called the
A)inflation rate
B)output gap
C)real interest rate
D)rate of compounding
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: The Financial System and the Economy
Available Study Resources on Quizplus for this Chatper
113 Verified Questions
113 Flashcards
Source URL: https://quizplus.com/quiz/72086
Sample Questions
Q1) Suppose the quantity demanded for a security is BD = 150 0.1b, And the quantity supplied of the security is BS = 50 + 0.1b,
Where b is the price of the security in dollars.The equilibrium price of the security is
A)$50.
B)$125.
C)$250.
D)$500.
Answer: D
Q2) An investor calculating the standard deviation of different investments is measuring the ______ of alternative investment portfolios.
A)expected return
B)risk
C)taxation
D)liquidity
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Money and Payments
Available Study Resources on Quizplus for this Chatper
67 Verified Questions
67 Flashcards
Source URL: https://quizplus.com/quiz/72087
Sample Questions
Q1) Which of the following statements correctly identifies a difference between inside money and outside money?
A)Inside money has value because the government decrees that it has value for payment of taxes, while outside money has value because it is made using expensive metals.
B)Inside money consists of wages and salaries earned by employees in the private sector, while outside money consists of wages and salaries earned by employees of the government sector.
C)Inside money cannot be used for making purchases from foreign sellers, while outside money can be used for making purchases from foreign sellers.
D)Inside money is created in the private sector, while outside money is created by the government or by nature.
Answer: D
Q2) Outside money is
A)money created by the government or by nature.
B)money created by the private sector, such as checking accounts at banks.
C)foreign currency.
D)checks that are in the process of clearing but have not cleared yet.
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Present Value
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/72088
Sample Questions
Q1) The amount repaid by a coupon bond at maturity is called its_____ value.
A)present
B)future
C)face
D)coupon
Q2) If the annual rate of interest in a market is 12%, the monthly rate of discount will equal
A)1%.
B)12%.
C)24%.
D)144%.
Q3) After amortizing the principal, a debt security that makes the same dollar payment every year is referred to as a A)coupon bond.
B)fixed-payment security.
C)discount bond.
D)perpetuity.
Q4) Consider a one-year discount bond that has a present value of $3,000.If the annual rate of discount is 5 percent, calculate the future value of the bond (the amount the bond pays in one year).
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: The Structure of Interest Rates
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/72089
Sample Questions
Q1) The U.S.Treasury security that was issued most recently, in the primary market, is known as the
A)off-the-run security.
B)on-the-run security.
C)in-the-money security.
D)out-of-the-money security.
Q2) Which of the following is true of the yield curve?
A)The yield curve is steep and is upward sloping when the recession ends and the economy starts to recover.
B)The yield curve is flat and is downward sloping when the recession ends and the economy starts to recover.
C)The yield curve is flat or inverted when the term premium is small.
D)The yield curve is downward sloping when the term premium is large.
Q3) What is the reason for a low rated security to generate a high yield to maturity?
Q4) The analysis of the term structure of interest rates assumes that
A)there is uncertainty about future interest rates.
B)there is no risk involved in the purchase and sale of longterm securities.
C)shortterm and longterm securities offer the same rate of interest.
D)there are no transaction costs.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Real Interest Rates
Available Study Resources on Quizplus for this Chatper
59 Verified Questions
59 Flashcards
Source URL: https://quizplus.com/quiz/72090
Sample Questions
Q1) Realized real interest rates in the United States were often negative in the early A)1960s.
B)1970s.
C)1980s.
D)1990s.
Q2) If the actual inflation was 4 percent over the past year and you owned a one-year bond that paid 4 percent interest, what was your after-tax realized real interest rate if your tax rate was 15 percent?
A) 0.6 percent
B)0.0 percent
C)1.1 percent
D)2.0 percent
Q3) Realized real interest rates in the United States were the highest in the A)1960s.
B)1970s.
C)1980s.
D)1990s.
Q4) Explain why inflation risk is a problem for investors.
Q5) How can the expected inflation rate be measured?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Stocks and Other Assets
Available Study Resources on Quizplus for this Chatper
81 Verified Questions
81 Flashcards
Source URL: https://quizplus.com/quiz/72091
Sample Questions
Q1) In the CAPM, systematic risk
A)is also known as idiosyncratic risk.
B)can be diversified away.
C)is also known as market risk.
D)is the risk to a stock's return that is not attributable to the fluctuations in the overall stock market.
Q2) Realized capital gains are
A)increases in the value of a firm that occur because a firm has retained earnings that are exempt from corporate profits taxes.
B)capital gains that are owned by foreigners.
C)capital gains that an investor receives from actually selling stock.
D)capital gains that have been accrued but not yet received because the stock has not been sold.
Q3) In the United States, the average annual real return on stocks from 1960 to 2012 has been approximately
A)1 percent.
B)2 percent.
C)7 percent.
D)10 percent.
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: How Banks Work
Available Study Resources on Quizplus for this Chatper
67 Verified Questions
67 Flashcards
Source URL: https://quizplus.com/quiz/72092
Sample Questions
Q1) The S&L crisis in the late 1970s and early 1980s was made much worse by
A)moral hazard, when regulators failed to close bankrupt S&Ls, which in turn caused a credit crunch.
B)adverse selection, when commercial banks were allowed to buy financially sound S&Ls but did not buy bankrupt S&Ls.
C)asymmetric information, because the government did not realize the bad financial condition of the S&Ls.
D)the regulatory dialectic.
Q2) A bank's reserves equal its
A)government securities.
B)transactions deposits.
C)vault cash plus deposits at the Federal Reserve.
D)cash assets plus government securities.
Q3) Which of the following is recorded under the asset side of a bank's balance sheet?
A)Transaction deposits
B)Equity capital
C)Borrowings
D)Reserves
To view all questions and flashcards with answers, click on the resource link above.
10
Chapter 9: Governments Role in Banking
Available Study Resources on Quizplus for this Chatper
96 Verified Questions
96 Flashcards
Source URL: https://quizplus.com/quiz/72093
Sample Questions
Q1) Suppose three banks in a banking market have market shares of 42 percent, 33 percent, and 25 percent.Calculate the HHI of the banking industry.
A)100
B)1,356
C)3,478
D)4,320
Q2) The Federal Deposit Insurance Corporation is the main supervisor for A)national banks that are part of a financial holding company or a bank holding company.
B)national banks that are not in a financial holding company or a bank holding company.
C)state banks that are not members of the Federal Reserve System.
D)state banks that do not have Federal Deposit Insurance Corporation insurance.
Q3) The Dodd-Frank Act requires that the FDIC restore its Deposit Insurance Fund to a healthy level by the year
A)2040.
B)2020.
C)2018.
D)2012.
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Economics Growth and Business Cycles
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/72094
Sample Questions
Q1) Suppose a country has a population of 61 million, of which 37 million are in the working-age population.Of those, 11 million are not in the labor force and 23 million are employed.The labor-force participation rate is
A)42.6 percent.
B)60.7 percent.
C)70.3 percent.
D)88.5 percent.
Q2) Which of the following is likely to happen according to monetarists if money supply in an economy decreases suddenly?
A)Output and employment falls
B)The interest rate falls
C)Investment rises
D)Consumption rises
Q3) If output grew 3.9 percent last year and hours worked grew 1.3 percent,then by how much did labor productivity grow over the year?
A)0.3 percent
B)2.6 percent
C)3.0 percent
D)5.2 percent
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Modeling Money
Available Study Resources on Quizplus for this Chatper
75 Verified Questions
75 Flashcards
Source URL: https://quizplus.com/quiz/72095
Sample Questions
Q1) The ATM model of the demand for cash is a
A)general-equilibrium model.
B)steady state model.
C)partial-equilibrium model.
D)no-equilibrium model.
Q2) What is the average cash holdings of someone who visits the ATM once every 8 days and spends $25 on a daily basis?
A)$12.50
B)$25
C)$100
D)$200
Q3) Suppose you have a 20 percent probability of having your cash lost or stolen, and you spend $25 each day.Your total cost of holding cash is (182.50/T) + (3.75 × T).
a.What is your cost of going to the ATM?
b.What is the nominal interest rate?
c.How often will you go to the ATM to minimize your costs?
Q4) Describe three different changes in the ATM model that would increase the time between ATM visits and increase the quantity of money demanded.
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: The Aggregate-Demandaggregate-Supply Model
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/72096
Sample Questions
Q1) Describe the arguement put forward by the Nobel laurete Robert E.Lucas about the flaws in the large structural macroeconomic models.
Q2) The largest component of aggregate demand is A)net exports.
B)government spending.
C)investment.
D)consumption.
Q3) In the aggregate demand-aggregate supply model, everything else remaining unchanged, an increase in capital stock shifts the_____ to the_____ .
A)long-run aggregate supply; right
B)aggregate demand; right
C)short-run aggregate supply; left
D)aggregate demand; left
Q4) Describe what monetary policymakers should do if they want to keep the price level in an economy permanently low.?
Q5) Describe the effect of expansionary monetary policy in a recession.Contrast the results with no monetary policy action.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Modern Macroeconomic Models
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/72097
Sample Questions
Q1) Critics of RBC models argue that
A)they cannot be solved analytically.
B)are subject to measurement errors.
C)it is not possible to replicate the models.
D)the models are estimated imprecisely.
Q2) The amount of goods and services that a household can consume, given its income, is represented by a(n)
A)indifference curve.
B)budget line.
C)demand curve.
D)supply curve.
Q3) In a structural VAR, a restriction that describes the impact of the current-period value of one variable on the value of another variable in the distant future is known as a_____ restriction.
A)contemporaneous
B)long-run
C)short-run
D)structural
Q4) Describe the new neoclassical synthesis.
Q5) What are the advantages and disadvantages of VAR models?
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Economic Interdependence
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/72098
Sample Questions
Q1) If the annual inflation rate is 3 percent in France and 5 percent in Italy, by how much will the real exchange rate change over a year? Assume that both countries use the euro so their nominal exchange rate cannot change.
A)2 percent
B)3/5 percent
C) 3/5 percent
D) 2 percent
Q2) If the nominal exchange rate is 5 French francs per U.S.dollar, then the exchange rate can also be written as
A)5 dollars per franc.
B)0.5 dollars per franc.
C)0.25 dollars per franc.
D)0.2 dollars per franc.
Q3) Explain why the correlation of output growth between the U.S.and Europe declined in the late 1980s and 1990s, even though the countries became more economically interdependent.What do you expect will happen to the correlation in the future?
Q4) Explain how a shock in one country can be transmitted to other countries.List three ways this can happen and give an example of each.
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: The Federal Reserve System
Available Study Resources on Quizplus for this Chatper
59 Verified Questions
59 Flashcards
Source URL: https://quizplus.com/quiz/72099
Sample Questions
Q1) During the period when Ben Bernanke was the Fed's Chairman, the inflation rate averaged at about 1.7%.In comparison to other periods when the Fed was headed over by other chairmen, this inflation rate can be considered to be
A)average.
B)the highest.
C)the lowest.
D)above average but not the highest.
Q2) When a central bank is not independent, the main economic variable that is affected is
A)unemployment.
B)output growth.
C)inflation.
D)consumption spending.
Q3) Which of the following Federal Reserve Banks performs the role of buying or selling currencies in the foreign exchange market?
A)The Federal Reserve Bank of Minneapolis
B)The Federal Reserve Bank of Boston
C)The Federal Reserve Bank of New York
D)The Federal Reserve Bank of San Francisco
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 16: Monetary Control
Available Study Resources on Quizplus for this Chatper
54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/72100
Sample Questions
Q1) Currency held by the nonbank public plus banks' vault cash plus banks' deposits at the Fed equals
A)the Fed's capital stock.
B)discount loans.
C)the monetary base.
D)required clearing balances.
Q2) The money multiplier equals
A)the money supply divided by the monetary base.
B)currency held by the non-bank public plus banks' reserves.
C)currency held by the non-bank public plus transaction accounts.
D)M2 divided by M1.
Q3) The Fed undertakes dynamic open-market operations
A)when it wants to change monetary policy.
B)because of seasonal effects.
C)when it wants to change fiscal policy.
D)to offset a temporary change in money demand.
Q4) Discuss the effectiveness of a monetary policy in an economy in which banks are indifferent between holding bonds and holding cash as reserves.
Q5) Since the 2008 financial crisis, what has happened to the M1 and M2 multipliers?
Page 18
To view all questions and flashcards with answers, click on the resource link above.
Chapter 17: Monetary Policy: Goals and Tradeoffs
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/72101
Sample Questions
Q1) The lag that arises because the random nature of economic data may make it difficult for policy makers to fully understand the state of the economy is referred to as the_____ lag.
A)implementation
B)recognition
C)effectiveness
D)decision
Q2) The amount of output that would be produced by an economy if resources were being utilized at a high rate that is sustainable in the long run is referred to as the A)potential output.
B)natural output.
C)Walrasian output.
D)partial-equilibrium output.
Q3) If the natural rate of unemployment is 5.2 percent and the unemployment rate is 5.5 percent, then the unemployment gap is
A) 5.8 percent.
B) 0.3 percent.
C)+0.3 percent.
D)+5.8 percent.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Rules for Monetary Policy
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/72102
Sample Questions
Q1) The average number of times a dollar of money is used for transactions over the course of a year is referred to as the
A)money multiplier.
B)velocity of money.
C)money growth rate.
D)extent of exchange.
Q2) The Fed is said to tighten policy when it
A)decreases both the money growth and the federal funds rate.
B)decreases the money growth and increases the federal funds rate.
C)increases both the money growth and the federal funds rate.
D)increases the money growth and decreases the federal funds rate.
Q3) If the growth rate of the money supply is 5 percent, the inflation rate is 2 percent, and real output growth is 2 percent, what is the growth rate of the velocity of money?
A) 5 percent
B) 1 percent
C)+1 percent
D)+5 percent
Q4) What are the major advantages and disadvantages of inflation targeting?
Q5) What challenges do policymakers and researchers face in using the Taylor rule?
To view all questions and flashcards with answers, click on the resource link above. Page 20