Exam 13: Banking and the Management of Financial Institutions

Bank reserves include ________.

Measuring the sensitivity of bank profits to changes in interest rates by multiplying the gap times the change in the interest rate is called ________.

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

In one sense ________ appears surprising since it means that the bank is not ________ its portfolio of loans and thus is exposing itself to more risk.

A bank will want to hold more excess reserves (everything else equal)when ________.

When a lender refuses to make a loan,although borrowers are willing to pay the stated interest rate or even a higher rate,the bank is said to engage in ________.

When banks offer borrowers smaller loans than they have requested,banks are said to ________.

In general,banks make profits by selling ________ liabilities and buying ________ assets.

Which of the following statements are true?

If a bank has $200,000 of demand deposits,a desired reserve ratio of 20 percent,and it holds $80,000 in reserves,then the maximum deposit outflow it can sustain without altering its balance sheet is ________.

Which of the following statements is false?

Which of the following statements is true?

In the absence of regulation,banks would probably hold ________.

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

When banks involved in trading activities attempt to outguess markets,they are ________.

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?

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

To reduce moral hazard problems,banks include restrictive covenants in loan contracts.In order for these restrictive covenants to be effective,banks must also ________.

When a $10 cheque written on the First National Bank is deposited in an account at CIBC,then ________.