Many would argue that the basic business model of commercial banks remained essentially unchanged from 1935 through 1970. The basic business can best be descibed as follows:

Question 4 options:

	Most commercial bank's generated the bulk of their profits from fees and gains on proprietary trading of securities for their own account.
	Most commercial bank's generated the bulk of their profits from developing and selling residential real estate projects for their own account.
	Most commercial bank's generated the bulk of their profits from the spread between the interest earned on loans to firms and the interest paid on deposits held by the bank.

Question 5 (2.5 points)

Identify the major factors that forced commercial banks to modify their business model in period from 1970 - 2000.

Question 5 options:

	Emergence and extraordinary growth of the Commercial Paper Market from 1970 -1990.
	The high levels of inflation and the associated high levels disintermediation experienced by most banks in the 1970's.
	In the 1970's U.S. banks saw increasing competition for borrowers as an growing number of major foreign banks began to operate in the U.S.
	All of the above!