41) Since 1974, commercial banks importance as a source of funds for nonfinancial borrowers
A) has shrunk dramatically, from around 40 percent of total credit advanced to below 30 percent by 2005.
B) has shrunk dramatically, from around 70 percent of total credit advanced to below 50 percent by 2005.
C) has expanded dramatically, from around 50 percent of total credit advanced to above 70 percent by 2005.
D) has expanded dramatically, from around 30 percent of total credit advanced to above 50 percent by 2005.
42) Thrift institutions importance as a source of funds for borrowers
A) has shrunk from around 40 percent of total credit advanced in the late 1970s to below 30 percent by 2005.
B) has shrunk from over 20 percent of total credit advanced in the late 1970s to below 6 percent by 2005.
C) has expanded dramatically, from around 15 percent of total credit advanced in the late 1970s to above 25 percent by 2005.
D) has expanded dramatically, from around 15 percent of total credit advanced in the late 1970s to above 30 percent by 2005.
43) Since 1980
A) bank profitability has declined.
B) banks have offset the decline in profits from traditional activities with increased income from off-balance-sheet activities.
C) banks have offset the decline in profits from off-balance-sheet activities with increased income from traditional activities.
D) bank profits have grown rapidly due to deregulation.
44) Financial innovation has caused
A) banks to suffer declines in their cost advantages in acquiring funds, although it has not caused a decline in income advantages.
B) banks to suffer a simultaneous decline of cost and income advantages.
C) banks to suffer declines in their income advantages in acquiring funds, although it has not caused a decline in cost advantages.
D) banks to achieve competitive advantages in both costs and income.
45) Disintermediation resulted from
A) interest rate ceilings combine with inflation-driven increases in interest rates.
B) elimination of Regulation Q (the regulation imposing interest rate ceilings on bank deposits).
C) increases in federal income taxes.
D) reserve requirements.
46) The experience of disintermediation in the banking industry illustrates that
A) more regulation of financial markets may avoid such problems in the future.
B) banks are unable to remain competitive with other financial intermediaries.
C) consumers no longer desire the services that banks provide.
D) markets invent alternatives to costly regulations.
47) Banks responded to disintermediation by
A) supporting the elimination of interest rate regulations, enabling them to better compete for funds.
B) opposing the elimination of interest rate regulations, as this would increase their cost of funds.
C) demanding that interest rate regulations be imposed on money market mutual funds.
D) supporting the elimination of interest rate regulations, as this would reduce their cost of funds.
48) One factor contributing to the decline in cost advantages that banks once had is the
A) decline in the importance of checkable deposits from over 60 percent of banks’ liabilities to under 10 percent today.
B) decline in the importance of savings deposits from over 60 percent of banks’ liabilities to under 15 percent today.
C) decline in the importance of checkable deposits from over 40 percent of banks’ liabilities to under 15 percent today.
D) decline in the importance of savings deposits from over 40 percent of banks’ liabilities to under 20 percent today.
49) The most important developments that have reduced banks cost advantages in the past thirty years include:
A) the growth of the junk bond market.
B) the competition from money market mutual funds.
C) the growth of securitization.
D) the growth in the commercial paper market.
50) The most important developments that have reduced banks income advantages in the past thirty years include:
A) the increase in off-balance sheet activities.
B) the growth of securitization.
C) the elimination of Regulation Q ceilings.
D) the competition from money market mutual funds.
51) Banks have attempted to maintain adequate profit levels by
A) making fewer riskier loans, such as commercial real estate loans.
B) pursuing new off-balance-sheet activities.
C) increasing reserve deposits at the Fed.
D) decreasing capital accounts..
52) The decline in traditional banking internationally can be attributed to
A) increased regulation.
B) improved information technology.
C) increasing monopoly power of banks over depositors.
D) increased protection from competition.
53) Why did the interest rate volatibility of the 1970s spur financial innovation?
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more