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 cannot lend as much money to the public.
B.   Member banks must keep more assets on deposit at the reserve bank.
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.   Prime rate
B.   Discount rate
C.   Adjustable rate
D.   Federal funds rate
Question #3
Which of the following actions did the Federal Reserve take in response to the 2007 financial crisis?
A.   Increased reserve requirements
B.   Increased rates
C.   Decreased rates
D.   Decreased reserve requirements
Question #4
Which statement most accurately describes the right of rescission?
A.   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
B.   It's the right of a consumer to take ownership of a property through the foreclosure process.
C.   It's another term for squatting, in which a consumer unlawfully occupies a residence.
D.   The two-business-day period after a loan closes, during which the borrower can cancel the loan.
Question #5
Which interest rate do banks use to offer consumer loans?
A.   Federal funds rate
B.   Adjustable rate
C.   Discount rate
D.   Prime rate
Question #6
Which of the following statements is true about the Federal Reserve?
A.   All banks must belong to the Federal Reserve.
B.   Twelve district banks comprise the Fed.
C.   Members of the Board of Governors serve 12-year terms.
D.   It is a governmental agency.
Question #7
What is the most likely effect when the Fed buys securities on the open market?
A.   Banks will have less money to lend.
B.   The economy may grow due to an increased money supply.
C.   Interest rates will increase.
D.   The economy may slow down due to a smaller money supply.

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