CA Real Estate Finance Course » 2021 » Sec 3 Unit 2 Exam

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Question #1
What does it mean if the Fed decreases reserve requirements?
A.   Member banks must keep more assets on deposit at the reserve bank.
B.   Member banks cannot lend as much money to the public.
C.   Member banks can keep fewer assets on deposit at the reserve bank.
D.   Member banks must increase interest rates on the loans they make.
Question #2
Roger has a sufficient income, has never missed a loan or credit payment, and has an adequate credit history. His credit score makes him a very creditworthy consumer. When obtaining a loan, which rate will he most likely get?
A.   Adjustable rate
B.   Prime rate
C.   Federal funds rate
D.   Discount rate
Question #3
Which of the following actions did the Federal Reserve take in response to the 2007 financial crisis?
A.   Increased rates
B.   Decreased rates
C.   Decreased reserve requirements
D.   Increased reserve requirements
Question #4
Which statement most accurately describes the right of rescission?
A.   It's the right of a consumer to take ownership of a property through the foreclosure process.
B.   The three-business-day period from the date a transaction is consummated or disclosures are delivered to the borrower, whichever is later, during which the borrower can cancel the loan
C.   The two-business-day period after a loan closes, during which the borrower can cancel the loan.
D.   It's another term for squatting, in which a consumer unlawfully occupies a residence.
Question #5
Which interest rate do banks use to offer consumer loans?
A.   Discount rate
B.   Adjustable rate
C.   Prime rate
D.   Federal funds rate
Question #6
Which of the following statements is true about the Federal Reserve?
A.   Twelve district banks comprise the Fed.
B.   Members of the Board of Governors serve 12-year terms.
C.   It is a governmental agency.
D.   All banks must belong to the Federal Reserve.
Question #7
What is the most likely effect when the Fed buys securities on the open market?
A.   The economy may slow down due to a smaller money supply.
B.   Banks will have less money to lend.
C.   Interest rates will increase.
D.   The economy may grow due to an increased money supply.

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