IHI 51.doc

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1. most shell branches of U.S. banks operate in:
a. japan
b. united kingdom
c. bahamas and british west indies
d. canada
2. which of the following forms of international banking organization is associated with interbank money market transactions?
a. representative office
b. shell branch
c. edge act corporation
d. international banking facility
3. international lending based on LIBOR with a rollover -pricing feature protects the bank from
a. liquidity risk
b. interest rate risk
c. default risk
d. solvency risk
4. An international lender’s concern about the changing tax rate on intereste income from an international loan is an example of:
a. credit risk
b. country risk
c. foreign exchange risk
d. reinvestment risk
5. The purpose of the international banking Act of 1978 was to:
a. return the competitvie edge to U.S. banks.
b. return competitive equality between domestiv and foreign banks
c. maintain fixed exchange rates
6. All of the following are techniques for reducing credit risk in international lending except:
a. foreign government guarantee of loans to private corporations
b. pooling risk through syndication with other banks
c. making floating-rate loans as opposed to fixed -rate loans
d. diversification
7. U.S. banks reduce their risk in foreign operations by:
a. seeking guarantee from borrowers
b.FDIC insurance
c. porfolio diversification
d.insurance throught the international monetary fund
8. Innovation around regulation followed by new regulation to offset the innovation is:
a. moral hazard
b. the innovation cycle
c. the regulatory dialectiv
d. securitization
9. Insurance or a guarantee to cover looses may create a moral hazard:
a. which is an increase in the chane that a random accident will occur
b. which is an incentive to decreased risk-taking by the insured
c. which is an incentive to increase risk-taking by the insurance authority.
d. which is an incentive to increase risk-taking by the insureed
10. the maximum amount of FDIC deposit insurance per eligible retirement account is:
a. 25,000
b. 50,000
c.250,000
d.150,000
11. The FDIC’S use of purchase and assumption resolution of failed banks has resulted in de facto 100 percent deposit insurance because:
a. all accounts up to 100,000 have been paid off by the FDIC
b. the assuming bank assumes all deposits of th failed banks
c. the assuming bank assumes all deposit up to 100,000
d. the large accounts above 100,000 are assumed by the FDIC
12. Which bank regulatory agency charters national banks?
a. the comptroller of the currency
b. the federal reserve
c. the FDIC
D, Individual state agencies
13. regulatory balance sheet restrictions are designed to:
a. encourage high risk-taking by proper diversification
b.limit proper diversification
c.limit risk-taking and encourage diversification
d. limit the size of depository institutions
14. The purpose of a bank examination is to
a. verify the bank’s financial statements according to general accepted accounting principles
b. maintain proper control of the bank by the FDIC
c. promote and safety, soundness and compliance with regulations
d. make sure the bank is not akeing any risk
15. The regulatory agency most directly concerned with supervising thrifts is th
a. FHLBB
B. OTS
C. OCC
d. Fed
16. The major assets of savings and loans are
a. mortgage-backed securities
b. construction loans
c. residential mortgages
d. cash and investment accounts
17. The FSLIC today:
a. has been replaced with the OTS and the FDIC-SAFE
b. insures federal S&Ls
c. regulates the capital position of S&LS
d. monitors the activities of th e12 FHLBS
18. All of the following EXCEPT—————- are classified to some extent as “thrift”
a. commercial banks
b. savings and loan associations
c. saving banks
d. credit unions
19. the account, other real estate owned(“OREO”) found as an asset on a savings and loan balance sheet, is associated with
a. the real estate associated with the home office and branches
b. the real estate financed by home mortgages
c. the real estate of manager and employees financed by the institution
d. reposed real estate associated with foreclosed mortgage loans not yet resold.
20. In contrast to depository institutions, finance companies tend to:
a. obtain their funds in large amounts, lend in small amount
b. obtain their funds in small amounts, lend in large amount
c. have a greater proportion of deposit of sources of funds
d. be less flexible in the ability to branch