Exam 10: Banking and the Management of Financial Institutions

Because borrowers,once they have a loan,are more likely to invest in high-risk investment projects,banks face the

Using T-accounts show what happens to reserves at Security National Bank if one individual deposits $1000 in cash into her checking account and another individual withdraws $750 in cash from her checking account.

Looking at the Net Interest Margin indicates that the poor bank performance in the late 1980s

Which of the following statements is false?

Collateral requirements lessen the consequences of ________ because the collateral reduces the lender's losses in the case of a loan default and it reduces ________ because the borrower has more to lose from a default.

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

When $1 million is deposited at a bank,the required reserve ratio is 20 percent,and the bank chooses not to hold any excess reserves but makes loans instead,then,in the bank's final balance sheet,

Which of the following statements are true?

In order to reduce the ________ problem in loan markets,bankers collect information from prospective borrowers to screen out the bad credit risks from the good ones.

Which of the following are primary concerns of the bank manager?

Which of the following are transaction deposits?

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

Long-term customer relationships ________ the cost of information collection and make it easier to ________ credit risks.

The goals of bank asset management include

With a 10% reserve requirement ratio,a $100 deposit into New Bank means that the maximum amount New Bank could lend is

If a bank has $10 million of checkable deposits,a required reserve ratio of 10 percent,and it holds $2 million in reserves,then it will not have enough reserves to support a deposit outflow of

Which of the following would a bank not hold as insurance against the highest cost of deposit outflow-bank failure?

Bank loans from the Federal Reserve are called ________ and represent a ________ of funds.

Banks hold excess and secondary reserves to

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