Banking Exam Awareness 3

Question 1

What is a 'currency transaction report' (CTR) in U.S. banking?

Accepted Answer

A mandatory report for cash transactions exceeding $10,000

Answer

Banks must file a CTR with FinCEN for any cash transaction exceeding $10,000, whether a deposit, withdrawal, or exchange.

Question 2

Which of the following best describes 'Basel III' in banking?

Accepted Answer

An international framework for bank capital adequacy, stress testing, and liquidity

Answer

Basel III is an international regulatory framework developed by the Basel Committee to strengthen bank capital requirements and reduce risk.

Question 3

What is 'loan-to-value ratio' (LTV) used to assess?

Accepted Answer

The risk of a mortgage loan relative to the property's appraised value

Answer

LTV compares the loan amount to the appraised property value; a higher LTV signals greater risk for the lender.

Question 4

What is the primary role of the Federal Open Market Committee (FOMC)?

Accepted Answer

Setting the federal funds rate and conducting open market operations

Answer

The FOMC directs U.S. monetary policy, including setting the target federal funds rate and managing the Fed's securities portfolio.

Question 5

Which type of bank account typically earns higher interest but restricts the number of monthly withdrawals?

Accepted Answer

Savings account

Answer

Savings accounts earn interest but historically limited withdrawals to six per month under Regulation D (though the Fed suspended this limit in 2020).

Banking Exam Practice Test

Banking Exam Practice Test

Banking Exam Awareness 3