CBP Banking Operations and Services 2

Question 1

A bank's net interest margin (NIM) is calculated as:

Accepted Answer

Net interest income divided by average earning assets

Answer

Total interest income minus total interest expense

Answer

Interest income divided by total deposits

Answer

Net income divided by total assets

Question 2

Which type of bank account typically earns the highest interest rate?

Accepted Answer

Certificate of deposit (CD)

Answer

Demand deposit account

Answer

Money market account

Answer

Basic checking account

Question 3

Under Regulation CC, what is the maximum hold period a bank may place on local checks for most customers?

Accepted Answer

Two business days

Answer

One business day

Answer

Five business days

Answer

Seven business days

Question 4

A correspondent banking relationship is best described as:

Accepted Answer

One bank providing services to another bank

Answer

A bank providing services to individual retail customers

Answer

A bank offering foreign currency exchange to businesses

Answer

Two banks sharing a single charter

Question 5

Which wire transfer system is used for large-value, time-critical interbank payments in the U.S.?

Accepted Answer

Fedwire

Answer

ACH

Answer

SWIFT

Answer

CHIPS

Question 6

When a bank sells a mortgage loan it originates, the bank is acting as a:

Accepted Answer

Mortgage banker

Answer

Portfolio lender

Answer

Mortgage servicer only

Answer

Secondary market investor

Question 7

A stop-payment order on a check is valid for how long under the UCC unless renewed?

Accepted Answer

6 months

Answer

30 days

Answer

60 days

Answer

1 year