Question 1

Which of the following statements is true?

Accepted Answer

A)   In general, U.S. banks are permitted to engage in a wider range of business activities in the U.S. than in foreign countries.
B)   In general, U.S. banks are permitted to engage in a wider range of business activities in foreign countries than in the U.S.
C)   In general, U.S. banks are permitted to engage in a wider range of business activities in the U.S. than foreign banks.
D)   In general, foreign banks are permitted to engage in a wider range of business activities in the U.S. than in their home countries.
E)   Both a and d are true statements.F) A) and E)
G) A) and B)

Question 2

Which of the following is not true about shell branches set by U.S. banks?

Accepted Answer

A)   They conduct limited interbank money market transactions rather than retail public operations.
B)   They do foreign exchange transactions and limited loan participation in Eurocurrency markets.
C)   They pay local taxes.
D)   All of the above are trueE) None of the above
F) A) and C) C

Question 3

Which institution created the Basel Accords for banking capital requirements?

Accepted Answer

A)   World Bank
B)   Bank for International Settlements
C)   European Central Bank
D)   Federal Reserve Board
E)   United Nations Financial Supervision CommitteeF) A) and D)
G) C) and E)

Question 4

Which of the following forms of international banking organization is a separate federal corporate charter to operate international banking business including equity investments?

Accepted Answer

A)   international banking facility
B)   foreign branch
C)   correspondent bank
D)   Edge Act bankE) B) and C)
F) A) and B)

Question 5

Which of the following is NOT true about International Banking Facilities (IBFs) ?

Accepted Answer

A)   IBFs may be established by a U.S.-chartered depository institution, a U.S. branch or agency of a foreign bank, or a U.S. office of an Edge Act Corporation.
B)   An IBFs is a set of asset and liability accounts segregated on the books of the establishing institution.
C)   IBFs can accept deposits over $100,000 from non-U.S. residents or other IBFs.
D)   Deposits generated can be used to make domestic loans only.
E)   All of the above is true.F) A) and C)
G) None of the above

Question 6

The Edge Act of 1919 permitted U.S. banks to create international banking facilities.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following forms of international banking organization is associated with providing a complete range of international banking services associated with foreign trade to domestic banks?

Accepted Answer

A)   international banking facility
B)   shell branch
C)   correspondent bank
D)   Edge Act bankE) All of the above
F) B) and C)

Question 8

Which statement regarding risk evaluation of international loan is NOT correct?

Accepted Answer

A)   An analysis of both the borrower and borrower's country is done by the bank's foreign lending and economic departments.
B)   Evaluation involves a statistical analysis of the country's political and economic risks.
C)   Since the accounting standards in different countries vary, a financial analysis of the borrower is not needed.
D)   If the cost of doing the analysis internally is too high, bank can use outside information sources. However, they should not be treated as reliable as the internal sources.
E)   The higher the cost of gathering information, the higher the loan rate, reflecting the increased risk due to unreliable information or lack of information.F) B) and D)
G) A) and E)

Question 9

All of the following are techniques reducing credit risk in international lending except

Accepted Answer

A)   foreign government guarantees of loans to private corporations.
B)   pooling risk through syndication with other banks.
C)   making floating-rate loans as opposed to fixed-rate loans.
D)   diversification.E) None of the above
F) B) and D) C

Question 10

Which of the following laws is NOT associated with U.S. regulation of international banking?

Accepted Answer

A)   Federal Reserve Act of 1913
B)   Edge Act of 1919
C)   National Banking Act of 1863
D)   International Banking Act of 1978E) All of the above
F) C) and D) C

Question 11

List the various organizational forms to deliver international banking services.

Accepted Answer

Representative offices, shell ...

Question 12

Pooling risk entails lending by several banks to a foreign borrower.

Accepted Answer

A) True 
 B)False

Question 13

The Foreign Credit Insurance Association (FCIA)  is an organization of U.S. insurance companies which

Accepted Answer

A)   insures the foreign lending risk (trade credit)  of exporters.
B)   insures the foreign lending risk (trade credit)  of importers.
C)   insures bank loans made to developing nations.
D)   assures that foreign exporters will pay their trade credit.E) A) and B)
F) All of the above

Question 14

Foreign branches of U.S. banks are subject to both the host nation's regulations and the regulations in the U.S.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is NOT a reason for the rapid expansion of U.S. banks overseas between 1980 and 2000 ?

Accepted Answer

A)   the establishment of the Edge Act
B)   overall expansion of U.S. world trade
C)   the growth of multinational corporations
D)   restrictions on outflow of funds from the U.S.
E)   the International Bank Act of 1978F) A) and B)
G) A) and C)

Question 16

An international lender's concern about the changing tax rate on interest income from an international loan is an example of

Accepted Answer

A)   credit risk.
B)   country risk.
C)   foreign exchange risk.
D)   reinvestment risk.E) C) and D)
F) A) and D)

Question 17

An Edge Act bank may

Accepted Answer

A)   be located in the United States outside a parent's own state.
B)   own foreign banking subsidiaries.
C)   engage only in international banking activities.
D)   all of the aboveE) All of the above
F) None of the above

Question 18

IBFs collect small domestic deposits and make foreign loans.

Accepted Answer

A) True 
 B)False

Question 19

A U.S. bank has just extended a U.S. $10 million loan to a Canadian firm at the rate of U.S. prime plus 2 percent, payable in U.S. dollars, one year from now. The current Canadian dollar/U.S. dollar exchange rate is 1.367. With a prime rate of 7 percent, what is the amount of interest paid in a year?

Accepted Answer

A)   C$ 1,230,300
B)   $900,000
C)   $700,000
D)   C$658,376E) All of the above
F) A) and B)

Question 20

Which of the following forms of international banking organization is a separately incorporated bank owned entirely or in part by a U.S. bank or bank holding company?

Accepted Answer

A)   foreign subsidiary bank
B)   international banking facility
C)   Edge Act bank
D)   shell branchE) None of the above
F) B) and C)

Exam 14: International Banking

Which of the following statements is true?

Correct Answer
verified

Which of the following is not true about shell branches set by U.S. banks?

Correct Answer
verified
C

Which institution created the Basel Accords for banking capital requirements?

Correct Answer
verified

Which of the following forms of international banking organization is a separate federal corporate charter to operate international banking business including equity investments?

Correct Answer
verified

Which of the following is NOT true about International Banking Facilities (IBFs) ?

Correct Answer
verified

The Edge Act of 1919 permitted U.S. banks to create international banking facilities.

Correct Answer
verified

Which of the following forms of international banking organization is associated with providing a complete range of international banking services associated with foreign trade to domestic banks?

Correct Answer
verified

Which statement regarding risk evaluation of international loan is NOT correct?

Correct Answer
verified

All of the following are techniques reducing credit risk in international lending except

Correct Answer
verified
C

Which of the following laws is NOT associated with U.S. regulation of international banking?

Correct Answer
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C

List the various organizational forms to deliver international banking services.

Correct Answer
verified
Representative offices, shell ...
View Answer

Pooling risk entails lending by several banks to a foreign borrower.

Correct Answer
verified

The Foreign Credit Insurance Association (FCIA) is an organization of U.S. insurance companies which

Correct Answer
verified

Foreign branches of U.S. banks are subject to both the host nation's regulations and the regulations in the U.S.

Correct Answer
verified

Which of the following is NOT a reason for the rapid expansion of U.S. banks overseas between 1980 and 2000 ?

Correct Answer
verified

An international lender's concern about the changing tax rate on interest income from an international loan is an example of

Correct Answer
verified

An Edge Act bank may

Correct Answer
verified

IBFs collect small domestic deposits and make foreign loans.

Correct Answer
verified

Correct Answer
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Which of the following forms of international banking organization is a separately incorporated bank owned entirely or in part by a U.S. bank or bank holding company?

Correct Answer
verified

Exam 14: International Banking

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Which of the following is not true about shell branches set by U.S. banks?

Correct AnswerverifiedC

Which institution created the Basel Accords for banking capital requirements?

Correct AnswerverifiedShow Answer

Which of the following forms of international banking organization is a separate federal corporate charter to operate international banking business including equity investments?

Correct AnswerverifiedShow Answer

Which of the following is NOT true about International Banking Facilities (IBFs) ?

Correct AnswerverifiedShow Answer

The Edge Act of 1919 permitted U.S. banks to create international banking facilities.

Correct AnswerverifiedShow Answer

Which of the following forms of international banking organization is associated with providing a complete range of international banking services associated with foreign trade to domestic banks?

Correct AnswerverifiedShow Answer

Which statement regarding risk evaluation of international loan is NOT correct?

Correct AnswerverifiedShow Answer

All of the following are techniques reducing credit risk in international lending except

Correct AnswerverifiedC

Which of the following laws is NOT associated with U.S. regulation of international banking?

Correct AnswerverifiedC

List the various organizational forms to deliver international banking services.

Correct AnswerverifiedRepresentative offices, shell ...View AnswerShow Answer

Pooling risk entails lending by several banks to a foreign borrower.

Correct AnswerverifiedShow Answer

The Foreign Credit Insurance Association (FCIA) is an organization of U.S. insurance companies which

Correct AnswerverifiedShow Answer

Foreign branches of U.S. banks are subject to both the host nation's regulations and the regulations in the U.S.

Correct AnswerverifiedShow Answer

Which of the following is NOT a reason for the rapid expansion of U.S. banks overseas between 1980 and 2000 ?

Correct AnswerverifiedShow Answer

An international lender's concern about the changing tax rate on interest income from an international loan is an example of

Correct AnswerverifiedShow Answer

An Edge Act bank may

Correct AnswerverifiedShow Answer

IBFs collect small domestic deposits and make foreign loans.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following forms of international banking organization is a separately incorporated bank owned entirely or in part by a U.S. bank or bank holding company?

Correct AnswerverifiedShow Answer

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C

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C

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C

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Representative offices, shell ...
View Answer

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