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| 1 | |
A finance company that's willing to lend to high-risk borrowers could be called a/an: |
| | A) | financial holding company. |
| | B) | prime lender. |
| | C) | QTL firm. |
| | D) | sub-prime lender. |
| | E) | captive finance company. |
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| 2 | |
Some thrift institutions are organized as ______________, which do not have stock outstanding. |
| | A) | mutuals |
| | B) | limited partnerships |
| | C) | general partnerships |
| | D) | corporations |
| | E) | individual proprietorships |
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| 3 | |
Two laws were passed in the early 1980s which widened the range of permitted activities for savings associations. These were: |
| | A) | FIRREA and FDICIA |
| | B) | Glass-Steagall and the BHC Act |
| | C) | Garn-St. Germain and FIRREA |
| | D) | Garn-St. Germain and DIDMCA |
| | E) | DIDMCA and the Financial Services Modernization Act |
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| 4 | |
At one time in the U.S., thrifts and banks faced government-imposed maximum rates on their deposit accounts. These rate restrictions were known as: |
| | A) | BIF |
| | B) | Glass-Steagall |
| | C) | Regulation Q |
| | D) | Regulation Y |
| | E) | DIDMCA |
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| 5 | |
A savings institution must hold a certain minimum portion of mortgage-related assets to pass the _______________ test. |
| | A) | OTS |
| | B) | capital requirement |
| | C) | reserve requirement |
| | D) | QTL |
| | E) | loan quality |
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| 6 | |
The federal charting agency for credit unions is: |
| | A) | The Federal Reserve |
| | B) | OTS |
| | C) | NCUA |
| | D) | FDIC |
| | E) | SAIF |
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| 7 | |
The chartering agency for savings institutions, at the federal level, is: |
| | A) | The Federal Reserve |
| | B) | OTS |
| | C) | NCUA |
| | D) | OCC |
| | E) | FDIC |
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| 8 | |
A thrift institution has the following: total assets = $600 million; total stockholders' equity = $53 million; net income = $9 million. What is the thrift's "return on equity"? |
| | A) | 66.7% |
| | B) | 17% |
| | C) | 5.9% |
| | D) | 11.3% |
| | E) | 8.8% |
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| 9 | |
The savings association problems of the 1980s were accentuated by an FSLIC policy of _________________; in essence, the FSLIC chose not to close insolvent institutions. |
| | A) | fraudulent regulation |
| | B) | open market operations |
| | C) | Regulation Q ceilings |
| | D) | regulator forbearance |
| | E) | usury rules |
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| 10 | |
The three main regulators of savings institutions are: |
| | A) | the Federal Reserve, the U.S. Department of Commerce, and the NYSE |
| | B) | the OTS, the FDIC, and state regulators |
| | C) | the OTS, the Federal Reserve, and the U.S. Department of Commerce |
| | D) | the FDIC, the Federal Reserve, and the World Bank |
| | E) | the FDIC, the World Bank, and state regulators |
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| 11 | |
Finance companies often charge ________ rates for consumer loans because they attract _______ customers than commercial banks. |
| | A) | lower; lower risk |
| | B) | lower; higher risk |
| | C) | higher; higher risk |
| | D) | higher; lower risk |
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| 12 | |
Credit unions are organized as: |
| | A) | corporations |
| | B) | mutuals |
| | C) | S-Corporations |
| | D) | limited partnerships |
| | E) | (c) and (d) |
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| 13 | |
_______________________ are the most numerous depository institutions in the U.S. |
| | A) | Credit unions |
| | B) | Savings associations |
| | C) | Savings banks |
| | D) | Commercial banks |
| | E) | Finance companies |
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| 14 | |
The first major finance company originated in the Great Depression, aimed at financing consumer transactions with: |
| | A) | General Motors |
| | B) | Ford Motor |
| | C) | Bank of America |
| | D) | Hoover Vacuum |
| | E) | General Electric |
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| 15 | |
Credit unions focus on loans to: |
| | A) | customers of particular manufacturers |
| | B) | small businesses |
| | C) | individuals |
| | D) | a variety of financial institutions |
| | E) | finance companies |
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| 16 | |
As of 2007, we observed the number of "savings institutions" to be closest to which of the following? |
| | A) | about 25,000 |
| | B) | about 15,000 |
| | C) | about 9,000 |
| | D) | about 7,500 |
| | E) | about 1,200 |
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| 17 | |
A arrangement to finance a vehicle dealer's inventory is often called a/an: |
| | A) | securitized loan |
| | B) | factoring agreement |
| | C) | floor plan loan |
| | D) | subprime lending agreement |
| | E) | captive finance agreement |
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| 18 | |
A/an ________________ is a specialist, extending credit to customers of a particular merchandise retailer. |
| | A) | factor |
| | B) | loan shark |
| | C) | subprime lender |
| | D) | sales finance institution |
| | E) | securitized lender |
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| 19 | |
If a lending institution is a subsidiary of a larger organization, extending credit to customers of that larger organization, we refer to it as a/an: |
| | A) | captive finance company |
| | B) | factor |
| | C) | floor plan agency |
| | D) | subprime lender |
| | E) | business credit institution |
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| 20 | |
Looking at the ten largest finance companies (as of 2007), we find that a majority are: |
| | A) | affiliated with auto manufacturers |
| | B) | affiliated with financial holding companies |
| | C) | stand alone firms, not associated with other financial or real sector firms |
| | D) | affiliated with appliance manufacturers |
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