Question

1) Which of the following statements is true regarding bank charters?

I. National banks are chartered by the U.S. comptroller of the currency.
II. Banks may be chartered at either the national or state level.
III. Only nationally-chartered banks can be members of the Federal Reserve System

Select one:

A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

2) Which of the following is true concerning commercial paper?

I. Commercial paper is offered in short-term maturities suitable for the money market
II. All public corporations qualify to issue commercial paper
III. The cost to the issuer of raising funds using commercial paper is usually lower than borrowing at the prime lending rate

Select one:

A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Answer 1

1. National banks are chartered by the U.S. comptroller of the currency this is true

Banks may be chartered at either the national or state level this is also true

Only nationally-chartered banks can be members of the Federal Reserve System this is not always the case

Hence, A. I and II only

2. Commercial paper is offered in short-term maturities suitable for the money market this is true

The cost to the issuer of raising funds using commercial paper is usually lower than borrowing at the prime lending rate this is true

All public corporations qualify to issue commercial paper this is true (since all large banks and corporations can issue CP and usually public corporations are large ones)

Hence , D. I, II, and III