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ABA CRCM Practice Test - Questions Answers, Page 13

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Country A (a foreign country that is boycotting Country B, another foreign country) has ordered goods from ABC, a U.S. corporation. Country A has opened a letter of credit with Overseas, Inc. , a foreign bank. The letter of credit specifies that ABC must certify that it does not do business with Country B. Overseas, InC. , sends a telegram to First National Bank, a U.S. bank, stating the major terms and conditions of the letter of credit and asking First National Bank to confirm the letter of credit. The telegram does not state the boycott provisions. Overseas mails the letter of credit to First National Bank and asks First National Bank to confirm it. What may First National Bank do?
_____________requires that a statement of purpose be obtained from borrowers whose loans are to be greater than $100,000 and that will be secured by margin stock. Loans made for the purpose of purchasing margin stock are subject to additional limitations
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Question 121

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Records regarding compliance with Regulation M must be kept for how long?

A.
Five years following consummation of the lease
A.
Five years following consummation of the lease
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B.
Two years after the disclosures are made
B.
Two years after the disclosures are made
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C.
Twenty-five months from consummation
C.
Twenty-five months from consummation
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D.
One year from the time the disclosures are made
D.
One year from the time the disclosures are made
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Suggested answer: B
asked 16/09/2024
John Ordonez
30 questions

Question 122

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Which of the following statements is true regarding the lessee's ability to purchase the leased property?

A.
The lessor must allow the lessee to purchase the leased property either during the lease term or at the end of the term.
A.
The lessor must allow the lessee to purchase the leased property either during the lease term or at the end of the term.
Answers
B.
If the lessor allows the lessee to purchase the property at the end of the lease term, the lessor may not charge more than the equivalent of 12 monthly payments for the property.
B.
If the lessor allows the lessee to purchase the property at the end of the lease term, the lessor may not charge more than the equivalent of 12 monthly payments for the property.
Answers
C.
If the lessor allows the lessee to purchase the property at the end of the lease term, the purchase price must be disclosed in the initial disclosure statement.
C.
If the lessor allows the lessee to purchase the property at the end of the lease term, the purchase price must be disclosed in the initial disclosure statement.
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D.
The purchase price of the leased property must be mutually agreed on by the lessor and the lessee.
D.
The purchase price of the leased property must be mutually agreed on by the lessor and the lessee.
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Suggested answer: C
asked 16/09/2024
Amirouche Rahani
48 questions

Question 123

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With regard to standards for wear and use of leased property, which of the following statements is true?

A.
A lessor must adhere to the manufacturer's standards for wear and use of the leased property.
A.
A lessor must adhere to the manufacturer's standards for wear and use of the leased property.
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B.
A lessor must develop and disclose its own standards for wear and use of leased property.
B.
A lessor must develop and disclose its own standards for wear and use of leased property.
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C.
A lessor must provide a notice of wear and use standards on motor vehicle leases.
C.
A lessor must provide a notice of wear and use standards on motor vehicle leases.
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D.
A lessor need not provide a notice of wear and use standards on motor vehicle leases if the lessor imposes an automatic, standardized charge.
D.
A lessor need not provide a notice of wear and use standards on motor vehicle leases if the lessor imposes an automatic, standardized charge.
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Suggested answer: C
asked 16/09/2024
Geert De Ridder
35 questions

Question 124

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In evaluating the coverage of a bank's Regulation U compliance for loans to purchase or carry margin stocks, which of the following securities is NOT covered in the regulatory definition of 'margin stock'?

A.
Any OTC stock
A.
Any OTC stock
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B.
A security issued by an investment company that is licensed under the Small Business Administration Act
B.
A security issued by an investment company that is licensed under the Small Business Administration Act
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C.
A warrant or right to subscribe to, or purchase, a margin stock
C.
A warrant or right to subscribe to, or purchase, a margin stock
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D.
An equity security registered, or having unlisted trading privileges, on a national exchange
D.
An equity security registered, or having unlisted trading privileges, on a national exchange
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Suggested answer: B
asked 16/09/2024
Wilfried Wagener
36 questions

Question 125

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For purposes of insider lending laws and regulations, what is the definition of the term executive officer?

A.
All bank officers at or above the level of executive vice president
A.
All bank officers at or above the level of executive vice president
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B.
Anyone who has the authority to participate in major policymaking functions at the bank NOTES
B.
Anyone who has the authority to participate in major policymaking functions at the bank NOTES
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C.
Anyone who has the authority to participate in lending decisions at the bank
C.
Anyone who has the authority to participate in lending decisions at the bank
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D.
All bank officers at or above the level of assistant vice president
D.
All bank officers at or above the level of assistant vice president
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Suggested answer: B
asked 16/09/2024
Randy Kana
33 questions

Question 126

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When may a bank pay an overdraft of $5,000 created by an executive officer of the bank?

A.
When the officer is at the level of a vice president or lower.
A.
When the officer is at the level of a vice president or lower.
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B.
When the officer has previously signed an overdraft protection credit agreement in an amount sufficient to cover the overdraft.
B.
When the officer has previously signed an overdraft protection credit agreement in an amount sufficient to cover the overdraft.
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C.
When the officer has enough funds in another account to cover the overdraft.
C.
When the officer has enough funds in another account to cover the overdraft.
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D.
When the bank pays the overdrafts for other good customers in the ordinary course of business.
D.
When the bank pays the overdrafts for other good customers in the ordinary course of business.
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Suggested answer: B
asked 16/09/2024
Tania Trif
50 questions

Question 127

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How may a bank limit the definition of executive officer?

A.
By strictly defining, in writing, the duties and responsibilities of the officers to be excluded from the definition
A.
By strictly defining, in writing, the duties and responsibilities of the officers to be excluded from the definition
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B.
By passing a board of directors resolution setting forth the bank's definition of an executive officer
B.
By passing a board of directors resolution setting forth the bank's definition of an executive officer
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C.
By requiring that those officers to be excluded from the definition not attend loan committee meetings or loan review meetings
C.
By requiring that those officers to be excluded from the definition not attend loan committee meetings or loan review meetings
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D.
By limiting the amount of confidential information given to those officers to be excluded from the definition
D.
By limiting the amount of confidential information given to those officers to be excluded from the definition
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Suggested answer: B
asked 16/09/2024
Mustafa Kubha
44 questions

Question 128

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First National Bank has an employee benefit program whereby all bank employees who meet the bank's credit underwriting standards may obtain consumer loans for major purchases or expenses at a rate that is less than the bank's prime rate. Can the bank allow its executive officers to borrow under this program?

A.
No. Executive officers may not have preferential interest rates under any circumstances.
A.
No. Executive officers may not have preferential interest rates under any circumstances.
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B.
No. However, the related interests of the executive officers may take advantage of it.
B.
No. However, the related interests of the executive officers may take advantage of it.
Answers
C.
Yes. However, executive officers must secure their loans with collateral valued at 100 percent of the loan balance or more.
C.
Yes. However, executive officers must secure their loans with collateral valued at 100 percent of the loan balance or more.
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D.
Yes. Provided the program is available to everyone at the bank as an employee benefit, executive officers may also participate.
D.
Yes. Provided the program is available to everyone at the bank as an employee benefit, executive officers may also participate.
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Suggested answer: D
asked 16/09/2024
Carmina Medel
33 questions

Question 129

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Which of the following is true regarding extensions of credit to executive officers, directors, and principal shareholders?

A.
Must be approved in advance by the board of directors if the aggregate credit is more than the greater of either $25,000 or 5 percent of the bank's capital and surplus, not exceeding $500,000
A.
Must be approved in advance by the board of directors if the aggregate credit is more than the greater of either $25,000 or 5 percent of the bank's capital and surplus, not exceeding $500,000
Answers
B.
Must be approved in advance by the board of directors if the credit is greater than $50,000 or 5 percent of the bank's capital and surplus
B.
Must be approved in advance by the board of directors if the credit is greater than $50,000 or 5 percent of the bank's capital and surplus
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C.
May not exceed $100,000 in the aggregate, regardless of approvals
C.
May not exceed $100,000 in the aggregate, regardless of approvals
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D.
May not exceed $250,000 in the aggregate, regardless of approvals
D.
May not exceed $250,000 in the aggregate, regardless of approvals
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Suggested answer: A
asked 16/09/2024
Michael Sheard
45 questions

Question 130

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What is the longest time after board approval that a bank can approve a line of credit for an executive officer?

A.
12 months of such approval
A.
12 months of such approval
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B.
9 months of such approval
B.
9 months of such approval
Answers
C.
14 months of such approval
C.
14 months of such approval
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D.
6 months of such approval
D.
6 months of such approval
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Suggested answer: C
asked 16/09/2024
Frantisek Kohanyi Kohanyi
37 questions
Total 463 questions
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