Commercial Banking Quiz 1 – Banking Fundamentals, Financial Institutions, and Credit
Operations Study Guide
In a typical year, more banks fail than merge - correct answer ✔✔False
The number of banks have fallen by more than half since 1990 - correct answer ✔✔True
U.S. commercial banks are NOT required to have FDIC deposit insurance - correct answer
✔✔True
A primary role of a commercial bank is to - correct answer ✔✔a. safe keep people's cash and
valuables
b. monitor the activities of hedge funds for systemic risk
c. invest in start up firms by taking short term equity takes
d. stabilize the nations security by selling foreign exchange
e. all of the above
Answers: A
All BHC's are FHC's but the reverse is not true - correct answer ✔✔False
Four large banks dominate the banking industry. They are - correct answer ✔✔Wells Fargo
Citibank
JP Morgan Chase
Bank of America
, In general, large banks that operate across several states have national charters because it
allows them to be more efficient by having one supervisor - correct answer ✔✔True
BHC's are allowed to have subsidiaries that conduct which of these activities? - correct answer
✔✔a. Insurance Policy Sales
b. Wealth Management
c. Commercial Banking
d. Trust Services
e. Mortgage Origination Answer: A
Unlike BHC's, Financial holding companies (FHC's) have no restrictions on offering these
activities: - correct answer ✔✔a. full service investment banking such as equity and bond
underwriting
b. insurance underwriting
c. merchant banking
d. wealth management
e. mortgage banking
Answer: a,b,&c
Which of these entities is a commercial bank? - correct answer ✔✔a. mortgage bank
b. investment bank
c. industrial loan corporation (ILC)
d. savings and loan
e. none of the above
Answer: c
Operations Study Guide
In a typical year, more banks fail than merge - correct answer ✔✔False
The number of banks have fallen by more than half since 1990 - correct answer ✔✔True
U.S. commercial banks are NOT required to have FDIC deposit insurance - correct answer
✔✔True
A primary role of a commercial bank is to - correct answer ✔✔a. safe keep people's cash and
valuables
b. monitor the activities of hedge funds for systemic risk
c. invest in start up firms by taking short term equity takes
d. stabilize the nations security by selling foreign exchange
e. all of the above
Answers: A
All BHC's are FHC's but the reverse is not true - correct answer ✔✔False
Four large banks dominate the banking industry. They are - correct answer ✔✔Wells Fargo
Citibank
JP Morgan Chase
Bank of America
, In general, large banks that operate across several states have national charters because it
allows them to be more efficient by having one supervisor - correct answer ✔✔True
BHC's are allowed to have subsidiaries that conduct which of these activities? - correct answer
✔✔a. Insurance Policy Sales
b. Wealth Management
c. Commercial Banking
d. Trust Services
e. Mortgage Origination Answer: A
Unlike BHC's, Financial holding companies (FHC's) have no restrictions on offering these
activities: - correct answer ✔✔a. full service investment banking such as equity and bond
underwriting
b. insurance underwriting
c. merchant banking
d. wealth management
e. mortgage banking
Answer: a,b,&c
Which of these entities is a commercial bank? - correct answer ✔✔a. mortgage bank
b. investment bank
c. industrial loan corporation (ILC)
d. savings and loan
e. none of the above
Answer: c
