Question 1

Interbank deposits generally carry:

Accepted Answer

A) low credit risk. 
B) high credit risk. 
C) highest credit risk. 
D) moderate credit risk. 
E) zero credit risk. 
A) low credit risk. 
B) high credit risk. 
C) highest credit risk. 
D) moderate credit risk. 
E) zero credit risk.

Question 2

As per the Basel Committee,a bank's operational risk includes:

Accepted Answer

A) employee fraud. 
B) accounting errors. 
C) computer breakdowns. 
D) natural disasters. 
E) All of the options are correct. 
A) employee fraud. 
B) accounting errors. 
C) computer breakdowns. 
D) natural disasters. 
E) All of the options are correct.

Question 3

Which of the following would be an example of credit risk?

Accepted Answer

A) A bank manager embezzles $1,000,000 from the bank. 
B) A bank that loses $500,000 from trading in foreign currencies. 
C) A $1,000,000 loan given to a business,on which no interest or principal has been collected in 2 years. 
D) A bank manager predicts interest rates will rise.However,interest rates fall causing the bank's net income to fall by $250,000. 
E) All of the options are examples of credit risk. 
A) A bank manager embezzles $1,000,000 from the bank. 
B) A bank that loses $500,000 from trading in foreign currencies. 
C) A $1,000,000 loan given to a business,on which no interest or principal has been collected in 2 years. 
D) A bank manager predicts interest rates will rise.However,interest rates fall causing the bank's net income to fall by $250,000. 
E) All of the options are examples of credit risk.

Question 4

A well-capitalized institution has a ratio of capital to risk-weighted assets of at least 10 percent and faces no significant regulatory restrictions on its expansion.

Accepted Answer

A) True 
 B)False

Question 5

The Third State Bank of Denton has decided to issue stock through a trust company and borrow the funds from the trust company.This stock pays a fixed dividend and because of the way the stock has been issued it is tax deductible.What way of meeting their capital needs in the bank taking?

Accepted Answer

A) Issuing common stock 
B) Issuing preferred stock 
C) Issuing subordinated notes and debentures 
D) Selling assets and leasing facilities 
E) Swapping stock for debt instruments 
A) Issuing common stock 
B) Issuing preferred stock 
C) Issuing subordinated notes and debentures 
D) Selling assets and leasing facilities 
E) Swapping stock for debt instruments

Question 6

Which of the following are the reasons for having the government set capital standards for financial institutions as opposed to letting the private marketplace set those standards?

Accepted Answer

A) To preserve public confidence 
B) To remove each bank's unique asset risk exposure 
C) To limit losses to the federal government arising from deposit insurance claims 
D) To preserve public confidence and to limit losses to the federal government arising from deposit insurance claims 
E) None of the options is correct. 
A) To preserve public confidence 
B) To remove each bank's unique asset risk exposure 
C) To limit losses to the federal government arising from deposit insurance claims 
D) To preserve public confidence and to limit losses to the federal government arising from deposit insurance claims 
E) None of the options is correct.

Question 7

Which of the following is in the 50 percent risk-weight (moderate credit risk)category?

Accepted Answer

A) Cash 
B) General obligation municipal bonds 
C) Residential mortgage loans 
D) Credit card loans 
E) None of the options is correct. 
A) Cash 
B) General obligation municipal bonds 
C) Residential mortgage loans 
D) Credit card loans 
E) None of the options is correct.

Question 8

Recent research suggests that interest-rate contracts display considerably less risk exposure than do foreign-currency contracts.

Accepted Answer

A) True 
 B)False

Question 9

__________________ is the amount in excess of stock's par value paid by the bank's shareholders.

Accepted Answer

The answer of __________________ is the amount in excess of...

Question 10

_________ are debt securities repayable from the sale of stock.

Accepted Answer

Equity com

Question 11

_________________ risk measures are being developed to be used when Basel III takes effect.

Accepted Answer

The answer of _________________ risk measures are being developed to...

Question 12

The Jennings Bank of Texas,wants to protect itself from credit risk by making large loans to corporate customers,by making residential mortgages to families,by making agriculture loans to farmers and ranchers in the area,by making small business loans to business along main street and by making automobile loans for the car dealership across the street from the bank.What defense against risk is this bank making?

Accepted Answer

A) Portfolio diversification 
B) Geographic diversification 
C) Quality management 
D) Increasing owners' capital 
E) None of the options is correct. 
A) Portfolio diversification 
B) Geographic diversification 
C) Quality management 
D) Increasing owners' capital 
E) None of the options is correct.

Question 13

A 'well capitalized' bank in the United States must have a leverage ratio of at least:

Accepted Answer

A) 4 percent 
B) 5 percent 
C) 6 percent 
D) 8 percent 
E) None of the options is correct. 
A) 4 percent 
B) 5 percent 
C) 6 percent 
D) 8 percent 
E) None of the options is correct.

Question 14

It is anticipated that Basel III may increase capital requirements for banks.

Accepted Answer

A) True 
 B)False

Question 15

The largest component of capital among banks is retained earnings.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a bank debt that appears to be highly sensitive to the market perception of the bank's risk?

Accepted Answer

A) Deposits 
B) Fed funds 
C) Repos 
D) Subordinated debt capital 
E) Preferred stock 
A) Deposits 
B) Fed funds 
C) Repos 
D) Subordinated debt capital 
E) Preferred stock

Question 17

_________________________ is measured by the par value of the shares of common equity outstanding.

Accepted Answer

The answer of _________________________ is measured by the par value...

Question 18

When all else fails,the ultimate defense against risk in banking is ________________________.

Accepted Answer

owners' ca

Question 19

A bank has capital to risk-weighted assets of 5.5%,Tier 1 capital to risk-weighted assets of 2.8% and a leverage ratio of 2.6%.What type of bank is this?

Accepted Answer

A) Well capitalized 
B) Adequately capitalized 
C) Undercapitalized 
D) Significantly undercapitalized 
E) Critically undercapitalized 
A) Well capitalized 
B) Adequately capitalized 
C) Undercapitalized 
D) Significantly undercapitalized 
E) Critically undercapitalized

Question 20

When the assets items on a bank's balance sheet and each off-balance-sheet commitment it has made are multiplied by the appropriate risk-weighting factor,they are often called ________________________.

Accepted Answer

risk-weigh

Interbank deposits generally carry:

As per the Basel Committee,a bank's operational risk includes:

Which of the following would be an example of credit risk?

A well-capitalized institution has a ratio of capital to risk-weighted assets of at least 10 percent and faces no significant regulatory restrictions on its expansion.

The Third State Bank of Denton has decided to issue stock through a trust company and borrow the funds from the trust company.This stock pays a fixed dividend and because of the way the stock has been issued it is tax deductible.What way of meeting their capital needs in the bank taking?

Which of the following are the reasons for having the government set capital standards for financial institutions as opposed to letting the private marketplace set those standards?

Which of the following is in the 50 percent risk-weight (moderate credit risk)category?

Recent research suggests that interest-rate contracts display considerably less risk exposure than do foreign-currency contracts.

__________________ is the amount in excess of stock's par value paid by the bank's shareholders.

_________ are debt securities repayable from the sale of stock.

_________________ risk measures are being developed to be used when Basel III takes effect.

A 'well capitalized' bank in the United States must have a leverage ratio of at least:

It is anticipated that Basel III may increase capital requirements for banks.

The largest component of capital among banks is retained earnings.

Which of the following is a bank debt that appears to be highly sensitive to the market perception of the bank's risk?

_________________________ is measured by the par value of the shares of common equity outstanding.

When all else fails,the ultimate defense against risk in banking is ________________________.

A bank has capital to risk-weighted assets of 5.5%,Tier 1 capital to risk-weighted assets of 2.8% and a leverage ratio of 2.6%.What type of bank is this?

When the assets items on a bank's balance sheet and each off-balance-sheet commitment it has made are multiplied by the appropriate risk-weighting factor,they are often called ________________________.

An Overview of the Changing Financial-Services Sector

The Impact of Government Policy and Regulation on the Financial-Services Industry

The Organization and Structure of Banking and the Financial-Services Industry

Establishing New Banks, Branches, ATMs, Telephone Services, and Websites

The Financial Statements of Banks and Their Principal Competitors

Measuring and Evaluating the Performance of Banks and Their Principal Competitors

Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques

Investment Banking,Insurance,and Other Sources of Fee Income

Risk Management: Asset-Backed Securities, Loan Sales, Credit Standbys, and Credit Derivatives

The Investment Function in Financial-Services Management

Liquidity and Reserves Management: Strategies and Policies

Managing and Pricing Deposit Services

Managing Nondeposit Liabilities

Investment Banking, insurance, and Other Sources of Fee Income

Lending Policies and Procedures: Managing Credit Risk

Lending to Business Firms and Pricing Business Loans

Consumer Loans, Credit Cards, and Real Estate Lending

Acquisitions and Mergers in Financial-Services Management

International Banking and the Future of Banking and Financial Services

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Exam 15: The Management of Capital

Interbank deposits generally carry:

As per the Basel Committee,a bank's operational risk includes:

Which of the following would be an example of credit risk?

A well-capitalized institution has a ratio of capital to risk-weighted assets of at least 10 percent and faces no significant regulatory restrictions on its expansion.

The Third State Bank of Denton has decided to issue stock through a trust company and borrow the funds from the trust company.This stock pays a fixed dividend and because of the way the stock has been issued it is tax deductible.What way of meeting their capital needs in the bank taking?

Which of the following are the reasons for having the government set capital standards for financial institutions as opposed to letting the private marketplace set those standards?

Which of the following is in the 50 percent risk-weight (moderate credit risk)category?

Recent research suggests that interest-rate contracts display considerably less risk exposure than do foreign-currency contracts.

__________________ is the amount in excess of stock's par value paid by the bank's shareholders.

_________ are debt securities repayable from the sale of stock.

_________________ risk measures are being developed to be used when Basel III takes effect.

A 'well capitalized' bank in the United States must have a leverage ratio of at least:

It is anticipated that Basel III may increase capital requirements for banks.

The largest component of capital among banks is retained earnings.

Which of the following is a bank debt that appears to be highly sensitive to the market perception of the bank's risk?

_________________________ is measured by the par value of the shares of common equity outstanding.

When all else fails,the ultimate defense against risk in banking is ________________________.

A bank has capital to risk-weighted assets of 5.5%,Tier 1 capital to risk-weighted assets of 2.8% and a leverage ratio of 2.6%.What type of bank is this?

When the assets items on a bank's balance sheet and each off-balance-sheet commitment it has made are multiplied by the appropriate risk-weighting factor,they are often called ________________________.

An Overview of the Changing Financial-Services Sector

The Impact of Government Policy and Regulation on the Financial-Services Industry

The Organization and Structure of Banking and the Financial-Services Industry

Establishing New Banks, Branches, ATMs, Telephone Services, and Websites

The Financial Statements of Banks and Their Principal Competitors

Measuring and Evaluating the Performance of Banks and Their Principal Competitors

Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques

Investment Banking,Insurance,and Other Sources of Fee Income

Risk Management: Asset-Backed Securities, Loan Sales, Credit Standbys, and Credit Derivatives

The Investment Function in Financial-Services Management

Liquidity and Reserves Management: Strategies and Policies

Managing and Pricing Deposit Services

Managing Nondeposit Liabilities

Investment Banking, insurance, and Other Sources of Fee Income

Lending Policies and Procedures: Managing Credit Risk

Lending to Business Firms and Pricing Business Loans

Consumer Loans, Credit Cards, and Real Estate Lending

Acquisitions and Mergers in Financial-Services Management

International Banking and the Future of Banking and Financial Services

Filters