Exam 13: Banking and the Management of Financial Institutions

The difference of rate-sensitive liabilities and rate-sensitive assets is known as the ________.

How can specializing in lending help to reduce the adverse selection problem in lending?

All else the same,if a bank's liabilities are more sensitive to interest rate fluctuations than are its assets,then ________ in interest rates will ________ bank profits.

The share of chequable deposits in total bank liabilities has ________.

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

One of the problems in conducting a duration gap analysis is that the duration gap is calculated assuming that interest rates for all maturities are the same.That means that the yield curve is ________.

Assuming that the average duration of its assets is four years,while the average duration of its liabilities is three years,then a 5 percentage point increase in interest rates will cause the net worth of First National to ________ by ________ of the total original asset value.

If a bank has ________ rate-sensitive assets than liabilities,then ________ in interest rates will increase bank profits.

Which of the following statements is false?

Which of the following is not a source of borrowings for a bank?

Conditions that likely contributed to a credit crunch in 2008 include ________.

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

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

The amount of assets per dollar of equity capital is called the ________.

A bank is insolvent when ________.

When you deposit $50 in currency at Old National Bank,________.

Asset transformation can be described as ________.

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

Banks earn profits by selling ________ with attractive combinations of liquidity,risk,and return,and using the proceeds to buy ________ with a different set of characteristics.

If,after a deposit outflow,a bank needs an additional $3 million to meet its desired reserves,the bank can ________.