Exam 10: Banking and the Management of Financial Institutions

If a bank has ________ rate-sensitive assets than liabilities,a ________ in interest rates will reduce bank profits,while a ________ in interest rates will raise bank profits.

Because of an expected rise in interest rates in the future,a banker will likely

From the standpoint of ________,specialization in lending is surprising but makes perfect sense when one considers the ________ problem.

Assuming that the average duration of its assets is five years,while the average duration of its liabilities is three years,then a 5 percentage point increase in interest rates will cause the net worth of First National to decline by ________ of the total original asset value.

A $5 million deposit outflow from a bank has the immediate effect of

When a bank suspects that a $1 million loan might prove to be bad debt that will have to be written off in the future the bank

If a banker expects interest rates to fall in the future,her best strategy for the present is

Which of the following is not an example of a backup line of credit?

Which of the following are reported as liabilities on a bank's balance sheet?

In general,banks would prefer to acquire funds quickly by ________ rather than ________.

For a given return on assets,the lower is bank capital,

All else the same,if a bank's liabilities are more sensitive to interest rate fluctuations than are its assets,then ________ in interest rates will ________ bank profits.

Which of the following statements most accurately describes the task of bank asset management?

Which of the following is not a source of borrowings for a bank?

One way for banks to reduce the principal-agent problems associated with trading activities is to

If a bank has ________ rate-sensitive assets than liabilities,then ________ in interest rates will increase bank profits.

Risk that is related to the uncertainty about interest rate movements is called

Holding all else constant,when a bank receives the funds for a deposited check,

When banks calculate the losses the institution would incur if an unusual combination of bad events happened,the bank is using the ________ approach.

The difference of rate-sensitive liabilities and rate-sensitive assets is known as the