1. Advantages of depositing funds into a typical bank account instead of directly buying corporate securities include all of the following EXCEPT A monitoring done by the bank on your behalf. B. Increased liquidity if funds are needed quickly. C. Increased transactions costs. D. less price risk when funds are needed. E better diversification of deposited funds. 2. The federal government has traditionally extended safety nets to Dls consisting of A. deposit insurance, discount window borrowing, and reserve requirements B. deposit Insurance and discount window borrowing. C. deposit insurance, unemployment insurance, and discount window borrowing. D. deposit insurance, open market operations, and discount window borrowing. E deposit insurance protection. 3. The future viability of the savings association industry in traditional mortgage lending has been questioned because of A securitization practices of other Fls. 8. the additional risk exposure of long-term mortgage lending. C. intense competition from other Fis. D. the liquidity risks associated with mortgage lending E. All of the above 4. A large number of the savings Institution failures during the in the 1980s was a result of A. Interest rate risk exposure. B. excessively risky investments. c. fraudulent behavior on the part of managers. D. All of the above. E. answers B and Conly. 5. One of the primary reasons that investment banks were allowed to convert to bank holding companies during the recen financial crisis was recognition that A. their operating activities were too risky and they needed the cushion of bank deposits to alleviate funding risks. B. the industry had acquired too much capital during the previous decade. c. bank holding companies needed the ability to underwrite new issues of corporate securities D. it was the only way an investment bank could qualify for federal balout funds. E the Federal Reserve was unable to purchase troubled assets from investment banks, but they could from bank hold companies 6. Finance companies have enjoyed very high rates of growth because they A. are willing to lend to riskier customers than commercial banks. B. charge higher rates on lower risk loans. C. do not have ties or affiliations with manufacturing firms. D. face very high levels of regulation, which assures their BUCCA E do not sell the loans that they originate. 7. Which of the following is NOT true? A The finance company industry tends to be very concentrated. B. Twenty of the largest finance companies account for more than 65% of the Industry assets