Deck 17: Electronic Banking

Question 1

Electronic banking began after the internet was developed and became widely used.

Answer 1

False

Question 2

In the U.S., cash accounts for about 87% of the volume of transactions made.

Answer 2

True

Question 3

Check and credit cards account for most retail funds transfers.

Answer 3

True

Question 4

ATMs are the most visible form of electronic banking.

Question 5

Proprietary ATM systems are increasingly popular.

Question 6

One of the major advantages of electronic bill presentment is that vendors can present their bills electronically to the customer's bank and be paid immediately.

Question 7

Because of the "unbanked," the U.S. government continues to use checks to make payments to individuals.

Question 8

Electronic money is legal tender.

Question 9

Electronic Data Capture (EDC) is used by CHIPS for clearing large-dollar payments.

Question 10

Seigniorage is a major component of the electronic funds transfer system for the unbanked and aged.

Question 11

Payments made over CHIPS have "finality."

Question 12

Settlement risk involves credit risk, liquidity risk, and interest rate risk.

Question 13

W.I.F.T. is used primarily for communications dealing with international funds transfers.

Question 14

Electronic banking began in the United States in

A) 1870s
B) 1920s
C) 1960s
D) 1980s

Question 15

Retail electronic banking refers to

A) cash withdrawals from financial institutions
B) small-dollar transfers
C) electronic retail payments by individuals and businesses
D) smart cards

Question 16

The most visible means of electronic banking is

A) Home mortgage loans
B) Internet brokerage
C) Electronic commerce
D) ATMs

Question 17

Most ATM systems today are

A) Part of CHIPS
B) Proprietary
C) Part of S.W.I.F.T
D) shared and national

Question 18

Electronic billing requires the billing firm to

A) Present the bill directly to the customer
B) Hire a system operator to present the bill to the customer
C) Send the customer a follow-up receipt
D) Present the bill to the customer's bank

Question 19

The Debt Collection Improvement Act of 1996 required

A) That Regulation E include make provisions for late payments
B) That debtors be given 90 days notice before foreclosure
C) That the U.S. government payments to individuals be done electronically
D) That banks notify retail customers of their account status when payments are overdue

Question 20

An "open system electronic purse" refers to

A) A debit card that can be used at multiple locations
B) A smart card that can be used at multiple locations
C) A credit card that can be used multiple locations
D) A point-of-sale terminal for EDC

Question 21

Brassage refers to

A) The metal used in coins
B) Private money
C) Legal tender
D) The cost of producing currency

Question 22

Real-term Gross Settlement is used by

A) Fedwire
B) S.W.I.F.T
C) CHIPS
D) Intuit and CheckFree

Question 23

Same-day settlement for large-dollar transfers

A) Multilateral netting
B) Gross settlement
C) Settlement at the end of the day
D) Settlement for each transaction as it occurs