Exam 12:Depository Institutions: Banks and Bank Management

A bank's assets tend to be long-term while its liabilities are short-term. Therefore, when interest rates rise, the value of the bank's assets:

Suppose a particular depository institution that specializes in residential mortgages is owned by its depositors. The institution is probably a:

If a bank has $200 million in deposits, the required reserve rate is 10 percent and the bank has $23 million in reserves:

Commercial banks differ from credit unions in the following way:

The largest liability for commercial banks in the U.S. is:

One of the cash items included on the asset side of banks' balance sheets is reserves. What makes up reserves and what is their purpose?

A bank's net worth is synonymous with its:

A bank has the following assets: Reserves of $15 million; Loans of $150 million; and Securities of $50 million. Their liabilities include Deposits of $150 million; Borrowed funds of $35 million and Bank Capital of $30 million. If the required reserve rate is 10 percent, answer the following: What is the amount of excess reserves the bank is currently holding? What are the options available to the bank if customers decide to withdraw $10 million in deposits?

Considering the balance sheet for all commercial banks in the U.S., the net worth of banks is:

Which of the following statements best completes this sentence: "On a bank's balance sheet…"?

What are the securities that U.S. banks own and why are they often referred to as secondary reserves?

Considering the balance sheet for all commercial banks in the U.S., the net worth of banks is:

Explain why a bank manager and a bank regulator would likely view the timing at which a loan should be charged to the loan loss reserve differently.

Capital is the cushion banks have against:

If Bank A sells some its loans to Bank B for cash, everything else equal:

Everything else equal, if the ratio of bank assets to bank capital increases, the bank's return on equity should:

Which of the following correctly portrays a bank's balance sheet?

Many people believed that when the calendar changed from December 31, 1999 to January 1, 2000, many bank records were going to be wiped out, so many people planned on withdrawing their funds. If this were to happen, this would be an example of:

Net interest income for a bank is:

Which of the following is a bank asset?