FINA 3317 Test 3 Questions with Correct Answers Latest Update 2025/2026

FINA 3317 Test 3 Questions with Correct Answers Latest Update 2025/2026 Core deposits typically include all except which one of the following? Demand deposits NOW Accounts MMDAs Eurodollar deposits - Answers Eurodollar deposits Core deposits include - Answers Demand deposits, NOW accounts, MMDAs All but which one of the following is an example of noninterest income? Income from service charges on deposits Gains and losses from trading account assets Earnings on securities held for investment Salaries and benefits paid - Answers Salaries and benefits paid to employees Largest source of income at a typical bank - Answers Interest income on leans and leases Examples of noninterest income - Answers Income from service charges on deposits Gains and losses from trading account assets Earnings on securities held for investment NCUA deposit insurance is generally limited to ________________ per depositor per credit union. - Answers $250,000 Areas of commercial bank regulation dealing with preventing banks from discriminating unfairly in lending are termed ______________________ regulations. - Answers Consumer protection Tier II (supplementary) capital includes which of the following? - Answers Allowance for loan and lease losses, up to 1.25% of risk-weighted assets Tier I (core) capital includes - Answers The highest quality form of capital equity Capital that absorbs losses but is not common equity Finance companies enjoy several advantages over banks. These include all but which one of the following? Finance companies can offer various types of products and services without regulatory interference. Finance companies can accept riskier customers than banks. Finance companies generally have lower overhead than banks. Finance companies have lower funds costs than banks. - Answers Finance companies have lower funds costs than banks. Finance companies advantages over banks include - Answers Finance companies can offer various types of products and services without regulatory interference. Finance companies can accept riskier customers than banks. Finance companies generally have lower overhead than banks. Least regulated institution - Answers Finance companies Most regulated institutions - Answers Banks Order of industry asset size from greatest to least - Answers Banks - Finance companies - credit unions - savings institutions Utilizes the least amount of deposits as a source of funds - Answers Finance companies Utilize the most amount of deposits as a source of funds - Answers Banks In a ________, new issues of a security are sold to buyers by the corporation or government agency ultimately using the funds. - Answers Primary market A _______ raises long-term money (equity and debt) - Answers Capital market A ____ us the market for short-term debts - Answers Money market The most active investment banking firm i the private placement market is - Answers Goldman Sachs Who went bankrupt in 2007 after 157 years of operation - Answers Lehman Brothers Who got bought by Bank of America and had $20B bailout from government - Answers Merrill Lynch ________ perform their main function in the primary market for securities and ________ perform their main function in the secondary market. - Answers Investment banks; securities brokers and dealers Tasks that investment bankers perform when acting as underwriters to sell securities to the public include - Answers pricing the security. preparing the filings required by the Securities and Exchange Commission. arranging for the security to be rated. In a ________ agreement, the investment banker makes no guarantee regarding the price the issuing firm will receive, but agrees to sell the securities on a commission basis. - Answers Best efforts: investment banker acts only as a distribution agent Which of the following statements about private placements is false? Private placements are more common for the sale of bonds than for stocks. Investment bankers, though not required for a private placement, often facilitate the transaction. Investment bankers help the issuing firm file the paperwork required by the SEC. None of the above are true - Answers Investment bankers help the issuing firm file the paperwork required by the SEC. Which of the following statements about private placements is true?