Deck 16: Other Financial Services

Question 1

The term "banking" is defined by laws and bank regulators.

Answer 1

False

Question 2

Bank holding companies can engage the performing of appraisals of real estate and commercial property.

Answer 2

True

Question 3

"Float" is the amount of check in the process of collection, but not yet converted into cash.

Answer 3

True

Question 4

A zero balance account is a cash concentration technique.

Question 5

Trade finance refers to letters of credit, foreign exchange, and other financial services that facilitate flows of funds.

Question 6

If you have an account for a sole proprietorship at the same bank where you have a checking account, your FDIC insurance coverage is $100,000.

Question 7

"Firewalls," are used by banks to separate investment banking from cash management services.

Question 8

Commercial banks can operate insurance companies and mutual funds in order to sell annuities and money market mutual funds.

Question 9

Bank sweep accounts are used to transfer funds from non-interest bearing accounts into bank syndicate accounts.

Question 10

A Real Estate Investment Trust (REIT) is a device used by investors to investors to buy shares in a trust that invests those funds in real estate.

Question 11

A trust company is a corporation formed for the purpose of taking, accepting, and executing trust, as well as acting a trustee and providing other services.

Question 12

A marital trust and revocable living trust are devices used in estate planning.

Question 13

The primary regulator of nonbanking activities of bank holding companies is

A) Office of the Comptroller of the Currency
B) Federal Deposit Insurance Corporation
C) Board of Governors of the Federal Reserve System
D) The Office of Thrift Supervision

Question 14

Lockboxes are part of the ______ services offered by banks.

A) Trust
B) Trade finance
C) Data Processing
D) Cash management

Question 15

Zero balance accounts are used in connection with

A) Controlled disbursement
B) Annuities
C) Business trusts
D) Mutual funds

Question 16

Which, if any of the following accounts is not covered by FDIC insurance?

A) A $100,000 savings account in your name
B) A $50,000 checking account in your name at the same bank
C) A $100,000 joint account with your mother
D) All of the accounts are covered

Question 17

Annuities are used to

A) Provide cash management services to small business
B) To provide tax deferred income to retirees
C) Like money market funds, they are a substitute for bank deposits
D) As a means of providing income in business trusts

Question 18

A "trust" is established by a

A) grantor
B) trustee
C) beneficiary
D) FDIC

Question 19

Sweep accounts are used to

A) Reduce the time necessary to collect bills
B) Transfer funds into a revocable trust
C) Get around the limitations of the Glass-Steagal Act
D) Increase interest income

Question 20

The syndication process is similar to

A) Underwriting
B) Insurance
C) Trusts
D) Controlled disbursement

Question 21

When a trustee hires a trust company to manage a corporate benefits program, the trust company is acting as an _____ for the trustee.

A) Agent
B) Beneficiary
C) Grantor
D) Invigilator

Question 22

Trust department are organized in two or more departments - one dealing with individual trust and the other with corporate trusts. Corporate trusts typically involve

A) Acting as trustee for bond issues
B) Making interest payments to bondholders
C) Maintaining escrow accounts
D) All of the above

Question 23

The Sherman Antitrust Act and the Clayton Act were concerned with

A) Business trusts
B) Credit shelter trust
C) Testamentary trusts
D) Trotten trusts