5 6. Non-transaction deposits tend to be: a. Non-interest-bearing b. Generally less expensive to process and manage C Are guaranteed to be renewed by customers at maturity d. Both (b) and (c) Reason(s) for capital regulation is (are): a. To limit the assets held by financial institutions b. To limit excessive loans generated by financial institutions To limit losses to the federal government arising from deposit Insurance claims d. Both (b) and (c) The following is one of the defenses against risk for a bank: a. Owners' capital b. Lower loan loss reserves C. Lower portfolio diversification d. Both (a) and (c) Interest rate risk is included in to determine if the institution has adequate capital a. Basel 1 and 2 b. Basel 1 and 3 C. Basel 2 and 3 d. Basel 2 7. 8. 9. 10. Capital: a. Provides funds needed to charter, organize and operate a financial firm. b. Provides funds for the development of new services and facilities. c. Serves as a regulator of growth. d. All of the above Basel agreement is an international agreement on capital standards and it is designed to: a. Keep institutions capital positioning strong. b. Increase competition among financial institutions. c. Increase amount of deposits available to banks. d. Increase financial institutions leverage. An increasingly important revenue source among competing financial firms is: a. Charge higher overdraft fees. b. Charge membership fees on credit cards, c. Charge penalty for excessive transactions on checking accounts. d Cross-sell traditional and new services to customers. A company that offers shares in a pool of securities and flows through any earnings generated to the shareholders is called: a. Trust services b. An insured fund G A mutual fund d. An annuity 11 12