MBA CHAPTER 14- Questions With All Correct
Answers
Of all the depository institutions, as a percentage of assets, credit unions rely
the most on deposit sources of funds.
True False correct answer -True
The policy employed in the 1980s of not closing economically insolvent
savings institutions was called regulatory forbearance.
True False correct answer -True
After deposits, the second largest source of funds at savings institutions is
FHLB loans.
True False correct answer -True
Savings institutions must have at least 65 percent of their assets in mortgage-
related areas in order to maintain their favorable tax status and obtain FHLB
loans.
True False correct answer -True
In a mutual organization, the depositors are owners of the institution.
True False correct answer -True
Traditionally, most credit union members had a common employer, but
increasingly the required commonality is a common location of either
residence or workplace.
True False correct answer -True
Savings institution deposits and bank deposits are backed by two different
insurance funds.
, True False correct answer -False
Credit unions are not taxed and, as a result, well-run credit unions are often
able to charge lower loan rates and pay slightly higher deposit rates than
banks.
True False correct answer -True
The National Credit Union Administration is the primary regulator of federally
chartered credit unions.
True False correct answer -True
There are more credit unions than other types of thrifts, but credit unions are
generally smaller than other types of thrifts.
True False correct answer -True
The largest U.S. banks are larger than the entire credit union industry.
True False correct answer -True
Because of the differences in the makeup of their major loan types, finance
companies typically have shorter-term loans than banks.
True False correct answer -True
Sales finance institutions specialize in loan sales to banks and thrifts.
True False correct answer -False
Which of the following trends in the number and industry assets of savings
institutions is/are correct?
I. The number of savings institutions has fallen over time.
II. The number of savings institutions has increased over time.
III. Total industry assets fell during the recession of the late 2000s.
Answers
Of all the depository institutions, as a percentage of assets, credit unions rely
the most on deposit sources of funds.
True False correct answer -True
The policy employed in the 1980s of not closing economically insolvent
savings institutions was called regulatory forbearance.
True False correct answer -True
After deposits, the second largest source of funds at savings institutions is
FHLB loans.
True False correct answer -True
Savings institutions must have at least 65 percent of their assets in mortgage-
related areas in order to maintain their favorable tax status and obtain FHLB
loans.
True False correct answer -True
In a mutual organization, the depositors are owners of the institution.
True False correct answer -True
Traditionally, most credit union members had a common employer, but
increasingly the required commonality is a common location of either
residence or workplace.
True False correct answer -True
Savings institution deposits and bank deposits are backed by two different
insurance funds.
, True False correct answer -False
Credit unions are not taxed and, as a result, well-run credit unions are often
able to charge lower loan rates and pay slightly higher deposit rates than
banks.
True False correct answer -True
The National Credit Union Administration is the primary regulator of federally
chartered credit unions.
True False correct answer -True
There are more credit unions than other types of thrifts, but credit unions are
generally smaller than other types of thrifts.
True False correct answer -True
The largest U.S. banks are larger than the entire credit union industry.
True False correct answer -True
Because of the differences in the makeup of their major loan types, finance
companies typically have shorter-term loans than banks.
True False correct answer -True
Sales finance institutions specialize in loan sales to banks and thrifts.
True False correct answer -False
Which of the following trends in the number and industry assets of savings
institutions is/are correct?
I. The number of savings institutions has fallen over time.
II. The number of savings institutions has increased over time.
III. Total industry assets fell during the recession of the late 2000s.
