Thrift Operations

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Question 1

Free

Multiple Choice

____ savings institutions hold the most assets in aggregate.

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Stock-owned

Mutual

Closely held

Privatized

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Question 2

Free

Multiple Choice

Which of the following statements is incorrect?

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A mutual-to-stock conversion allows savings institutions to obtain additional capital by issuing stock.

Because of their ownership structure, mutual savings institutions are more susceptible to unfriendly takeovers.

When a mutual savings institution is involved in an acquisition, it first converts to a stock-owned savings institution.

Consolidation and acquisitions have caused the number of mutual and stock savings institutions to decline consistently over the years.

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Question 3

Free

Multiple Choice

Federally chartered savings institutions are regulated by the

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Securities and Exchange Commission (SEC).

National Credit Union Administration.

Comptroller of the Currency and the Federal Reserve.

U.S. Treasury.

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Question 4

Free

Multiple Choice

Savings institutions obtain most of their funds from

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savings and time deposits.

loans.

mortgages.

repurchase agreements.

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Question 5

Free

Multiple Choice

When savings institutions are unable to attract sufficient deposits, they can

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borrow in the federal funds market.

borrow from the Federal Reserve.

borrow through a repurchase agreement.

all of the above

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Question 6

True/False

The capital of savings institutions is primarily composed of retained earnings and funds obtained from issuing stock.

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True

False

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Question 7

Multiple Choice

If depositors move money from their checking accounts to short-term CDs, this would ____ the rate sensitivity of the savings institution's liabilities to interest rate movements.

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increase

have no effect on

decrease

A or C, depending on the size of the savings institution

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Question 8

Multiple Choice

____ are the primary asset of savings institutions.

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Mortgages

Cash balances

Investment securities

Business loans

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Question 9

Multiple Choice

____ do not represent an asset of credit unions.

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Mortgage-backed securities

Home equity loans

Automobile loans

Stocks

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Question 10

Multiple Choice

Which of the following is not an asset of savings institutions?

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loans

mortgages

NOW accounts

mortgage-backed securities

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Question 11

Multiple Choice

Most mortgages originated by savings institutions are for

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commercial buildings.

land for commercial purposes.

single-family homes or multifamily dwellings.

none of the above.

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Question 12

Multiple Choice

If a savings institution's assets have a considerably longer duration than its liabilities, it can reduce its exposure to interest rate risk by

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reducing its proportion of assets in the short duration categories.

increasing its proportion of liabilities in the short duration categories.

increasing its proportion of liabilities in the long duration category.

A and B

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Question 13

Multiple Choice

Adjustable-rate mortgages the adverse impact of rising interest rates on a typical savings institution's spread. They the favorable impact of declining interest rates on the spread.

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reduce; reduce

reduce; increase

increase; increase

increase; reduce

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Question 14

Multiple Choice

To measure ____ risk, some savings institutions measure the duration of their respective assets and liabilities.

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credit

interest rate

liquidity

none of the above

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Question 15

Multiple Choice

A contract that allows for the purchase of a specified debt security for a specified price at a future point in time is known as a(n)

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interest rate futures contract.

interest rate swap contract.

interest cap contract.

security swap contract.

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Question 16

True/False

An interest rate swap reduces the favorable impact of declining interest rates.

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True

False

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Question 17

Multiple Choice

A savings institution owned by its depositors is a ____ savings institution.

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mutual

stock

credit

closed-end

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Question 18

Multiple Choice

Which of the following was not a major reason for the savings institution crisis in the late 1980s?

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large losses on real estate loans

large losses on loans to less-developed countries

fraud

illiquidity

increased interest expenses

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Question 19

Multiple Choice

The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) prohibited savings institutions from

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merging

offering mortgage loans .

investing in junk bonds.

making loans to foreign governments.

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Question 20

Multiple Choice

The risk that a credit union will experience an unanticipated wave of withdrawals without an offsetting amount of new deposits is ____ risk.

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credit (default)

interest rate

liquidity

exchange rate

none of the above

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Thrift Operations

____ savings institutions hold the most assets in aggregate.

Which of the following statements is incorrect?

Federally chartered savings institutions are regulated by the

Savings institutions obtain most of their funds from

When savings institutions are unable to attract sufficient deposits, they can

The capital of savings institutions is primarily composed of retained earnings and funds obtained from issuing stock.

If depositors move money from their checking accounts to short-term CDs, this would ____ the rate sensitivity of the savings institution's liabilities to interest rate movements.

____ are the primary asset of savings institutions.

____ do not represent an asset of credit unions.

Which of the following is not an asset of savings institutions?

Most mortgages originated by savings institutions are for

If a savings institution's assets have a considerably longer duration than its liabilities, it can reduce its exposure to interest rate risk by

Adjustable-rate mortgages ____ the adverse impact of rising interest rates on a typical savings institution's spread. They ____ the favorable impact of declining interest rates on the spread.

To measure ____ risk, some savings institutions measure the duration of their respective assets and liabilities.

A contract that allows for the purchase of a specified debt security for a specified price at a future point in time is known as a(n)

An interest rate swap reduces the favorable impact of declining interest rates.

A savings institution owned by its depositors is a ____ savings institution.

Which of the following was not a major reason for the savings institution crisis in the late 1980s?

The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) prohibited savings institutions from

The risk that a credit union will experience an unanticipated wave of withdrawals without an offsetting amount of new deposits is ____ risk.

Adjustable-rate mortgages the adverse impact of rising interest rates on a typical savings institution's spread. They the favorable impact of declining interest rates on the spread.