Part 2 of 2 - Multiple Choice 2 Points Question 1 of 17 The stock market's "Conglomerate Discount" suggests that the market believes that corporate mergers and acquisitions often: A. result in major cost savings due to economies of scope. OB. result in major cost savings due to economies of scale. O C. result in major efficiency gains. D. result in losses due to inefficiencies. O Reset Selection 2 Points Question 2 of 17 Investments in technology: A. benefit large banks more than small banks. Question 7 of 17 2 Points If a financial institution has a large, positive duration gap: O A. it will lose money if there are sharp increases in inflation. O B. it will lose money if there is a sharp decline in market interest rates. OC. the duration of its liabilities is greater than the duration of its assets. D. it is unlike most financial institutions that have negative duration gaps. Reset Selection Reset Selection 2 Points Question 9 of 17 Empirical evidence has found that some commercial banks have significantly lower costs than other commercial banks of similar size. This is referred to as: OA. being too large to fail. OB. Economies of Scale. OC. Economies of Scope. OD. X efficiencies. Reset Selection 2 Points estion 10 of 17 4 Points Question 7 of 11 Banks often make long-term loans at a floating, rather than a fixed, rate. Explain what is the advantage to banks? Maximum number of characters including HTML tags added by text editor): 32,000 Show Rich-Text Editor (and character count) 6 Points 2 Points Question 11 of 17 Which is false? Economies of scope: OA. are also called economies of joint production. B. could refer to a commercial bank expanding by acquiring other commercial banks. OC. could refer to a bank and an insurance company sharing technology resources. D. if large, could result in the financial industry being dominated by all-service, universal financial institutions rather than single specialty financial institutions. Reset Selection 2 Points Question 12 of 17 All of the following are correct except: nook Dro Reset Selection 2 Points Question 9 of 17 Empirical evidence has found that some commercial banks have significantly lower costs than other commercial banks of similar size. This is referred to as: OA. being too large to fail. OB. Economies of Scale. OC. Economies of Scope. OD. X efficiencies. Reset Selection 2 Points estion 10 of 17 2 Points Question 13 of 17 For Bank Holding Companies, all of the following are correct except: A. they have played an important role in assisting banks to expand geographically. OB. they have played an important role in assisting banks to offer more products. OC. they rely on Chinese Walls to prevent the spread of inside information. OD. There are no exceptions; all these answers are correct. Reset Selection Reset Selection 2 Points Question 15 of 17 Listed below are several possible motives why financial institutions merge. In which of these, would society and the economy benefit from a merger? A. X efficiencies B. Becoming too difficult to take over with a hostile takeover C. Becoming too big to fail D. The impact on conflicts of interest Reset Selection 2 Points Question 16 of 17 Reset Selection 2 Points Quesuun 16 of 17 16, Which is true? OA. Banks expanding nationwide prefer establishing branches rather than multibank holding company subsidiaries. B. Bank concentration in the U.S. is much higher than in Canada. C. Bank concentration in the U.S is much higher than in Western Europe. OD. All of these answers are true. Reset Selection 2 Points Ounction 17 of 17