Chapter 8- Review Questions 21. The Gramm-Leach-Bliley Act, which fully repealed the A) use of creative corporate B) restriction on finance comounting C) was passed in 1999. ke deposits separation of commercial banks and securities firms D) restrictions placed upon shareholders 22. The creation of the financial holding company Citigroup was made possible by the passage of the A) B) Glass-Steagall Act Gramm-Leach-Bliley Act. Sarbanes-Oxley Act C) D) Sherman Antitrust Act. 23. A credit union is different from a savings and loan because it: A) mon grop st have. restricts the maximum balance a depositor m only makes mortgage loans. will not accept checking deposits. B C) D) 24. A bank charter is a government license to operate a bank. A) B) set of rules set up by individual banks. list of possible interest rates charged by banks. list of bank operating processes. C) D) to reduce this they rely on 25. Banks are reluctant to lend to borrowers with weak credit histories because of oble )high defau ;high interest rates adverse selection; credit reports rates B) adverse asymmetric information; expanding credit 26. Securitization benefits for banks include: increased liquidity. A) decreased diversification. B) increased risk of default on individual loans. None of the answers are correct. C) D) 27. Subprime lenders include: A) pawnshops finance companies. B) title loan companies C) D All f the answers are correct. 28. By 2007, over A) of all mortgages were securitized. 50 percent 25 percent 75 percent 10 percent B) C) 29. Credit ratings reduce: credit rationing. A) moral hazard. adverse selection. venture capital. B) C DI 30. When was Secretary of the Treasury, he argued for John Adams; state-chartered banks A) Thomas Jefferson; a gold standard B) C) Alexander Hamilton; a central bank D) George Washington; low interest rates