Exam 10: The Economics of Banking

If a bank's ratio of assets to capital is 25 and it's return on assets is -5%, what is its return on equity?

Bank capital can best be described as:

A financial contract in which a bank agrees to sell the expected future returns from an underlying bank loan to a third party is referred to as:

Which of the following represented the largest liability on the balance sheet of U.S. commercial banks in 2012?

The prime interest rate is the

Which of the following is a bank asset?

Why are U.S. government securities referred to as a bank's secondary reserves?

Which of the following has led to reduced use of ATMs?

A bank's revenue comes from all of the following EXCEPT

Limits on the value of the assets that commercial banks can acquire relative to their capital is known as:

Which of the following is a bank liability?

How does the use of adjustable-rate mortgages affect interest-rate risk?

How do banks manage credit risk?

Banks in the United States have been prohibited from investing deposits in significant equity holdings since the passage of the

Banks experience interest rate risk

Given that most banks have positive gap and negative durations, banks prefer

Using statistical models to estimate the maximum losses a portfolio's value is likely to sustain over a particular time period is called:

In what ways does a certificate of deposit (CD)differ from a savings deposit?

The Federal Reserve System was created in

In banking, the spread refers to the difference between the