Site MapHelpFeedbackMultiple Choice Quiz
Multiple Choice Quiz
(See related pages)

1
The Glass-Steagall Act of 1933:
A)Required commercial banks to sell off their investment banking operations.
B)Eliminated the FDIC.
C)Required federally chartered banks to meet the branching restrictions of the states.
D)Required all state banks to get federal charters.
2
The actual results of the McFadden Act included:
A)Increased efficiency of banking across the country.
B)A tight network of interconnected banks across the country.
C)A safety net that allowed small inefficient banks to continue to operate.
D)The elimination of banking monopolies.
3
Bank holding companies were developed:
A)To get around the limitations on bank branching.
B)So foreign banks could open branches in the U.S.
C)To circumvent the regulation by the Office of the Comptroller of the Currency.
D)So that unit banks could combine into larger banks.
4
One of the results of the Reigle-Neal Interstate Banking and Branching Efficiency Act of 1994 was:
A)A reversal of the branching restrictions of the McFadden Act.
B)An increase in the number of banks in the U.S.
C)A decrease in the average size of banks.
D)A decrease in commercial banks but an increase in the number of savings and loans and savings banks.
5
The Gramm-Leach-Bliley Act:
A)Repealed the Reigle-Neal Interstate Banking and Branching Efficiency Act.
B)Repealed the Glass-Steagall Act's prohibition of mergers between commercial banks and insurance or securities firms.
C)Repealed the McFadden Act's restriction on bank branching.
D)Reinforced the Glass-Steagall Act's limitation on commercial banks' availability to merge with insurance or securities firms by increasing the penalties for doing so.
6
Which of the following is not a reason to create large financial holding companies?
A)Financial holding companies offer a wide array of services under one brand name.
B)Financial holding companies need only one CEO, one Board of Directors, and one accounting system regardless of size.
C)Financial holding companies are well diversified so risk is reduced.
D)Financial holding companies are exempt from having to pay for FDIC insurance on deposits.
7
Whole life insurance differs from term life in which of the following ways?
A)Whole life has a variable premium over the life of the policy, increasing as the policyholder gets older. Term life has a fixed premium forever.
B)Term life has a savings component, whole life is pure insurance.
C)Term life is usually more expensive than whole life.
D)Whole life is a combination of term life insurance and a savings account.
8
A young father needing to provide his family with financial security would be better off purchasing:
A)A whole life insurance policy.
B)A term life insurance policy.
C)As much life insurance as they can afford.
D)No life insurance; instead he should focus on saving.
9
A person who discovers that he/she has advanced stages of cancer and calls his/her life insurance agent to double his/her insurance policy is an example of:
A)A moral hazard risk.
B)The risk of adverse selection.
C)The problem of information symmetry.
D)Risk spreading.
10
A homeowner discovers that a large tree in his yard is diseased and may fall in a bad windstorm and if it falls, it will likely destroy the garage. The cost to have the tree cut down is significant but the homeowner has an insurance policy and figures that if the tree falls and destroys the garage, the insurance company will pay. The deductible is less than the cost to have the tree removed. This is an example of:
A)Information symmetry.
B)Adverse selection.
C)Moral hazard.
D)Screening.
11
One way insurance companies deal with the problem of adverse selection is by:
A)Charging the same price to everyone.
B)Screening applicants.
C)Monitoring policyholders after they have purchased insurance.
D)Spreading the risk in the same geographic area.
12
Many health insurers require a deductible where the policyholder pays the first part of any loss. The use of a deductible most directly treats the problem of:
A)Information symmetry.
B)Adverse selection.
C)People going uninsured.
D)Moral hazard.
13
Vesting can make job changes costly because:
A)You may not be able to take your entire pension benefit from your previous job with you.
B)Once you leave one job fully vested the only other pension you can be eligible for is Social Security.
C)You can only become fully vested in one company's pension.
D)Vested employees earn higher returns on their funds.
14
Defined-benefit plans:
A)Are more common than defined contribution plans.
B)Pay a pension based on the amount contributed into the plan by the employee and employer.
C)Do not require any responsibility on the part of the employer for the employees' retirement income; it is based on employee contributions.
D)Usually require an employee to work a very long time for the same employer in order to reap a large benefit.
15
In a defined-contribution plan:
A)Only the employee makes contributions into the fund.
B)The retirement benefits will vary with both the amount contributed and the performance of the fund.
C)The benefits are determined mainly by years of service.
D)No vesting is required; employees are eligible for benefits from the time they make their first contribution.





To learn more about the book this website supports, please visit its Information Center.
Copyright (c)2015 McGraw-Hill Education .
Any use is subject to the Terms of Use and Privacy Notice | Report Piracy


MBFM 4eOnline Learning Center

Home > Chapter 13 > Multiple Choice Quiz