Com422
COMM 422 Winter 2013 Assignment 1 – Due Jan 31, 2013 Please hand in the answer sheet only.
Student No.:___________________________ Student Name: _________________________
1 2 3 4 5 6 7 8 9 10
11 12 13 14 15 16 17 18 19 20
21 22 23 24 25 26 27 28 29 30
31 32 33 34 35 36 37 38 39 40
41 42 43 44 45 46 47 48 49 50
51 52 53 54 55 56 57 58 59 60
1-1
1
Which of the following measures the difference between the private costs of regulations and the private benefits for the producers of financial services? a. Capital adequacy b. Agency costs c. Net regulatory burden d. Charter value e. Liquidity risk FIs are special because a. their failure can impose negative externalities on the economy. b. they receive special regulatory oversight. c. their business is the management of money. d. they provide a source of backup liquidity to nonfinancial firms. e. we are studying them. What is globalization? a. The process whereby FI focus more intensely on their own domestic market. b. Acceptance of the Federal Reserve as the regulator of the world financial system. c. Usually refers to the initiation of GLOBEX, a new international financial communications and trading system. d. The evolution of markets and institutions so that geographic boundaries do not restrict financial transactions. e. Joint ownership of international electronic payments systems. Negative externalities occur when a. the fear of FI insolvency leads to bank deposit runs. b. lending activity is curtailed. c. there are delays in disbursements from insolvent FIs. d. All of the above. e. A and B only. Identify the procedure by which a banker refuses to make loans to residents living inside given geographic boundaries. a. Credit allocation b. Redlining c. Intermediation d. Externalization e. Spinning Why is the failure of a large bank more detrimental to the economy than the failure of a large steel manufacturer? a. The bank failure usually leads to a government bailout. b. There are fewer
Student No.:___________________________ Student Name: _________________________
1 2 3 4 5 6 7 8 9 10
11 12 13 14 15 16 17 18 19 20
21 22 23 24 25 26 27 28 29 30
31 32 33 34 35 36 37 38 39 40
41 42 43 44 45 46 47 48 49 50
51 52 53 54 55 56 57 58 59 60
1-1
1
Which of the following measures the difference between the private costs of regulations and the private benefits for the producers of financial services? a. Capital adequacy b. Agency costs c. Net regulatory burden d. Charter value e. Liquidity risk FIs are special because a. their failure can impose negative externalities on the economy. b. they receive special regulatory oversight. c. their business is the management of money. d. they provide a source of backup liquidity to nonfinancial firms. e. we are studying them. What is globalization? a. The process whereby FI focus more intensely on their own domestic market. b. Acceptance of the Federal Reserve as the regulator of the world financial system. c. Usually refers to the initiation of GLOBEX, a new international financial communications and trading system. d. The evolution of markets and institutions so that geographic boundaries do not restrict financial transactions. e. Joint ownership of international electronic payments systems. Negative externalities occur when a. the fear of FI insolvency leads to bank deposit runs. b. lending activity is curtailed. c. there are delays in disbursements from insolvent FIs. d. All of the above. e. A and B only. Identify the procedure by which a banker refuses to make loans to residents living inside given geographic boundaries. a. Credit allocation b. Redlining c. Intermediation d. Externalization e. Spinning Why is the failure of a large bank more detrimental to the economy than the failure of a large steel manufacturer? a. The bank failure usually leads to a government bailout. b. There are fewer