The McFadden Act of 1927

question 102

Multiple Choice

The McFadden Act of 1927

• A)effectively prohibited banks from branching across state lines.
• B)required that banks maintain bank capital equal to at least 6 percent of their assets.
• C)effectively required that banks maintain a correspondent relationship with large money center banks.
• D)separated the commercial banks and investment banks.

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Definitions:

Stock Repurchase

A stock repurchase is when a company buys back its own shares from the marketplace, often to increase the value of remaining shares.

Payables Turnover Rate

A financial efficiency ratio that measures how quickly a company pays off its suppliers by comparing net credit purchases to average accounts payable.

Cash Cycle

The period between the outlay of cash for the purchase of raw materials and the collection of cash from the sale of products, indicating the efficiency of a company's cash management.

Operating Cycle

The duration between the acquisition of inventory by a company and the collection of payment for the sales of that inventory.