Exam 10: Banking and the Management of Financial Institutions

The principal-agent problem that exists for bank trading activities can be reduced through

Because ________ are less liquid for the depositor than ________,they earn higher interest rates.

A bank failure occurs whenever

Banks that suffered significant losses in the 1980s made the mistake of

If a bank needs to raise the amount of capital relative to assets,a bank manager might choose to

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

Examples of off-balance-sheet activities include

When a $10 check written on the First National Bank of Chicago is deposited in an account at Citibank,then

A deposit outflow results in equal reductions in

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

Bank capital is equal to ________ minus ________.

Holding large amounts of bank capital helps prevent bank failures because

If a bank has excess reserves greater than the amount of a deposit outflow,the outflow will result in equal reductions in

Banks acquire the funds that they use to purchase income-earning assets from such sources as

If interest rates increase from 9 percent to 10 percent,a bank with a duration gap of 2 years would experience a decrease in its net worth of

Which of the following has not resulted from more active liability management on the part of banks?

Which of the following are not reported as assets on a bank's balance sheet?

-If interest rates rise by 5 percentage points,say from 10 to 15%,bank profits (measured using gap analysis)will

Duration analysis involves comparing the average duration of the bank's ________ to the average duration of its ________.

The largest percentage of banks' holdings of securities consist of