Question 1

Bank branch offices are often specially configured today to maximize sales opportunities.

Accepted Answer

This is true, as banks often arrange their physical spaces in a way that encourages customers to engage with sales and marketing materials, and to have conversations with bank representatives about additional products or services they could use.

Question 2

A customer can use a POS terminal at a store to pay for his purchases through a debit or a credit card.

Accepted Answer

A POS terminal (Point of Sale) is commonly used at stores to accept payments through debit or credit cards.

Question 3

The total number of full-service branch offices has declined in the United States in recent years.

Accepted Answer

The answer of The total number of full-service branch offices...

Question 4

Society pays a price if it restricts the number of bank charters below the number that the private sector normally would generate due to lessened competition.

Accepted Answer

When there is restricted competition in the banking sector due to limitations on the number of bank charters, it can lead to reduced innovation, higher fees, and lower quality of service for consumers. Therefore, society pays a price if the private sector's ability to generate bank charters is restricted.

Question 5

Higher levels of savings deposits are usually found in those bank branch office locations where there is a higher proportion of residents with above-average age and residents who own their own homes.

Accepted Answer

This statement is generally true. Older individuals tend to have more savings, and homeownership is typically associated with higher levels of financial stability and savings. Therefore, areas with a higher proportion of older residents and homeowners are likely to have higher levels of savings deposits in their bank branch offices.

Question 6

More desirable office sites for new bank branches normally have residents who are above-average in age.

Accepted Answer

Older residents typically have more savings and are more likely to require banking services such as wealth management and retirement planning.

Question 7

One of the benefits of applying for a federal banking charter is that banks need not join the Federal Reserve System.

Accepted Answer

Banks that obtain a federal banking charter are required to join the Federal Reserve System.

Question 8

One of the keys to branch office profitability is to apply the latest information technology and thereby lower personnel costs.

Accepted Answer

By using the latest information technology, branch offices can automate tasks and processes that would otherwise require more personnel to perform. This can lead to cost savings and higher profitability for the branch office.

Question 9

ATMs are profitable for all banks since they can eliminate tellers at branches that have ATMs.

Accepted Answer

ATMs can reduce the need for tellers by automating routine transactions, but their profitability for banks depends on various factors such as installation and maintenance costs, transaction volume, and fee structure. Not all banks may find ATMs profitable, especially if the costs outweigh the savings from reduced teller needs.

Question 10

The optimal choice for a new branch site must be one that offers the bank the highest expected rate of return on the capital invested in the project.

Accepted Answer

The optimal choice for a new branch site should be based on its potential to provide the highest expected rate of return on the capital investment. This is important for the bank's profitability and long-term success.

Question 11

Most U.S.banks are chartered in urban areas.

Accepted Answer

According to the Federal Deposit Insurance Corporation (FDIC), the majority of U.S. banks are chartered in urban areas. As of June 2021, 4,426 out of 4,895 total FDIC-insured commercial banks were located in urban areas.

Question 12

To close a bank branch office in the United States,a bank must give its customers 30 days advance notice.

Accepted Answer

A bank must give its customers at least 90 days advance notice before closing a branch office in the United States.

Question 13

One argument frequently presented for regulation and control over bank chartering activity is that banks can create money and chartering too many might result in excessive money creation and inflation in the economy.

Accepted Answer

This argument is true. Banks create money through the process of lending, and if too many banks are chartered and lend excessively, it can lead to an increase in the money supply and inflation. Regulation and control over bank chartering activity can help prevent this from happening.

Question 14

Newly designed bank branch offices in recent years have emphasized more heavily on effective communication of service options to the customers in an effort to promote service sales.

Accepted Answer

This statement is true. As banking services become more diverse and complex, banks have emphasized effective communication of service options to customers to increase sales and improve customer satisfaction.

Question 15

State banking commissions,on average,impose tougher standards for chartering new banks than the federal chartering agency,the Comptroller of the Currency.

Accepted Answer

State banking commissions often have different standards, but not necessarily tougher than those imposed by the federal chartering agency, the Comptroller of the Currency. The stringency of regulations can vary by state and does not uniformly exceed federal standards.

Question 16

Most new banks are situated along major routes of travel for commuters going to work,shopping areas,and schools.

Accepted Answer

This statement is true, as most new banks are strategically located in areas with high foot traffic for commuters, shoppers, and students.

Question 17

"Public need" is usually established with federal or state chartering authorities by showing that existing banks in the area are adequately profitable and have satisfactory amounts of capital.

Accepted Answer

Public need is typically established by showing that existing banks in the area are not meeting the credit needs of the community, rather than just looking at profitability and capital levels.

Question 18

Applying for a bank charter from the Comptroller of the Currency is simultaneously followed by an application for FDIC insurance,to expedite the formation process and save duplication of efforts.

Accepted Answer

This statement is true. Banks typically apply for both a charter from the Comptroller of the Currency and FDIC insurance simultaneously in order to streamline the process and avoid duplicating efforts.

Question 19

Half of all transactions made through an ATM machine are deposits.

Accepted Answer

This statement cannot be proven true or false without additional information or context. The percentage of deposits made through ATMs can vary depending on factors such as location, bank policies, and customer behavior.

Question 20

The first ATM machine could only handle cash withdrawals.

Accepted Answer

The first ATM machine, invented in 1967, could only handle cash withdrawals.

Quiz 4: Establishing New Banks, Branches, ATMs, Telephone Services, and Websites