Exam 13: Managing Liabilities

Profits are maximized on deposit accounts when the marginal total costs equal the marginal total revenues.

Banks can borrow funds from the twelve regional Federal Reserve banks through:

Where do banks obtain brokered deposits?

A Eurodollar deposit is the deposit of European euro in a European bank.

What is a NOW account?

___________is a time draft drawn on a bank by either an exporter or an importer to finance international business transactions.

What type of bank deposit source of funds is most sensitive to both changes in bank risk and interest rates?

How do large time deposits differ from small time deposits?

Which of the following is(are) explicit prices paid by banks to acquire deposits?

Federal funds are transfers from the federal government to banks.

Brokered deposits are transfers of large deposits in excess of $100,000 from one bank to another bank.

In the event of bank failure, capital notes and debentures are subordinate to bank deposits.

Repurchase agreements are different from federal funds in that:

Implicit service returns are an important part of the rate of return on purchased deposits.

What type of deposits provide the most stable, long-term source of funds for banks?

The yield on bankers' acceptances tends to be slightly below that of comparable maturity Treasury yields.

Which of the following are short-term, unsecured transfers of immediately available funds between depository institutions for use in one business day.

Discount window advances allow banks to arbitrage profits by investing advances in financial assets with rates of return that exceed the cost of such advances.