Which of the following is one of the four primary goals of banking supervision and regulation?

A. provide financial services for the federal government

B. promote an efficient and competitive financial system

C. regulate discount window activities

D. none of the above

The correct answer is B

A bank is examined in which of the following areas?

A. safety and soundness

B. community reinvestment

C. consumer affairs

D. all of the above

The correct answer is D

What is a bank's primary source of income

A. interest on loans made to borrowers

B. fees on checking accounts

C. fees on savings accounts

D. transaction fees on automatic debit cards

The correct answer is A

What are CAMELS ratings?

A. an acronym for the process of rating a bank on its security system

B. a measure of fluctuations in interest rates

C. an acronym used by safety and soundness examiners, which stands for the six components of a bank's condition

D. none of the above

The correct answer is C

Which of the following is not one of the "5-Cs" used to rate the quality of a loan?

A. collateral

B. character

C. capital

D. call report

The correct answer is D

Which of the following is not a bank regulator?

A. Bureau of the Public Debt

B. Federal Reserve

C. Office of the Comptroller of the Currency

D. Federal Deposit Insurance Corporation

The correct answer is A

What is the term for the refusal of a bank to lend money to low income communities while, at the same time, accepting deposits from those areas?

A. Moral hazard

B. Redlining

C. CAMELS

D. Finance charge

The correct answer is B

Which of the following would an examiner most likely use to evaluate a bank's compliance with the Community Reinvestment Act?

A. accurate information on a savings account brochure

B. segregation of duties

C. diversity of loan distribution in the bank's community

D. none of the above

The correct answer is C

The Community Reinvestment Act requires that

A. city governments restore run-down areas of the community.

B. banks help meet the credit needs of their entire community.

C. banks must be a member of the Federal Reserve System.

D. citizens deposit money in a bank within their community.

The correct answer is B

Which of the following could you find in a bank's brochure for a savings account?

A. average percentage yield

B. any minimum balance required

C. any monthly service fee

D. all of the above

The correct answer is D