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Money, Banking, and Financial Markets Practice Test: The Banking Industry
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The US banking industry is dominated by four large banks: JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup. These four banks are among the largest in the world, and almost all banks in the country are insured by the Federal Deposit Insurance Corporation (FDIC). The US banking system has a unique structure called the dual banking system, where banks are licensed on either the national or state level, and are overseen by different regulatory agencies depending on their license level.  Here are some other characteristics of the US banking industry: The US has more commercial banks... Show more
Money, Banking, and Financial Markets Practice Test: The Banking Industry
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25 Questions

1. The most significant change in the economic environment that changed the demand for financial products in recent years has been
2. Since 1980
3. In a ________ banking system, commercial banks engage in securities underwriting, but legal subsidiaries conduct the different activities. Also, banking and insurance are not typically undertaken together in this system.
4. A firm issuing credit cards earns income from
5. Sweep accounts which were created to avoid reserve requirements became possible because of a change in ________.
6. A disadvantage of virtual banks (clicks) is that
7. Critics of nationwide banking fear
8. Financial instruments whose payoffs are linked to previously issued securities are called________.
9. Both ________ and ________ were financial innovations that occurred because of interest rate risk volatility.
10. In this type of arrangement, any balances above a certain amount in a corporationʹs checking account at the end of the business day are ʺremovedʺ and invested in overnight securities that pay the corporation interest. This innovation is referred to as a
11. Which of the following is a true statement concerning bank holding companies?
12. The declining cost of computer technology has made ________ a reality.
13. Unlike banks, ________ have been allowed to branch statewide since 1980.
14. Which bank regulatory agency has the sole regulatory authority over bank holding companies?
15. Thrift institutions importance as a source of funds for borrowers
16. One of the concerns of increased bank consolidation is the reduction in community banks which could result in
17. The process in which people take their funds out of the banking system seeking higher-yielding securities is called
18. Bank holding companies that rival money center banks in size, but are not located in money center cities are
19. The most important developments that have reduced banks cost advantages in the past thirty years include:
20. With the creation of the Federal Deposit Insurance Corporation, member banks of the FederalReserve System ________ to purchase FDIC insurance for their depositors, while non-member commercial banks ________ to buy deposit insurance.
21. Since 1974, commercial banks importance as a source of funds for nonfinancial borrowers
22. Banks responded to disintermediation by
23. One factor contributing to the decline in cost advantages that banks once had is the
24. A debit card differs from a credit card in that
25. The Federal Reserve Act of 1913 required that