Question 1

Loans and leases are financial outputs on a financial institution's balance sheet or Report of Condition.

Accepted Answer

A) True 
 B)False  True

Question 2

Except for commercial banks,savings & loans and savings banks hold the most deposits.

Accepted Answer

A) True 
 B)False  True

Question 3

U.S.banks (especially those with $500 million or more in total assets)are required to file financial statements,audited by an independent public accountant,with their principal federal regulatory agency and with the FDIC.

Accepted Answer

A) True 
 B)False  True

Question 4

"Painting the tape" refers to the practice whereby banks understate their nonperforming loans.

Accepted Answer

A) True 
 B)False

Question 5

You know the following information about the Taylor National Bank: $\begin{array} { l r } 
\text { Provision for loan losses } & \$ 100 \
\text { Income taxes } & 140 \
\text { Noninterest income } & 500 \
\text { Dividends } & 60 \
\text { Securities gains (losses) } & 50 \
\text { Interest income } & 1,500 \
\text { Noninterest expense } & 750 \
\text { Interest expenses } & 750
\end{array}$
Given this information,what is the value of this firm's net income?

Accepted Answer

A) $150 
B) $210 
C) $400 
D) ($250) 
E) $750 
A) $150 
B) $210 
C) $400 
D) ($250) 
E) $750

Question 6

You know the following information about the Webb State Bank: $\begin{array} { l r } 
\text { Accumulated depreciation } & \$ 40 \
\text { Net loans } & 600 \
\text { Fed Funds purchased and repurchase agreements } & 200 \
\text { Cash and due from banks } & 50 \
\text { Trading account securities } & 40 \
\text { Miscellaneous assets } & 100 \
\text { Deposits } & 500 \
\text { Undivided profits } & 140 \
\text { Gross premises } & 90 \
\text { Surplus } & 40 \
\text { Subordinated debt } & 100 \
\text { Investment securities } & 160 \
\text { Common stock par } & 20 \
\text { Gross loans } & 700
\end{array}$
Given this information,what is the value of this firm's total liabilities?

Accepted Answer

A) $1,000 
B) $300 
C) $800 
D) $200 
E) $500 
A) $1,000 
B) $300 
C) $800 
D) $200 
E) $500

Question 7

A bank sells shares of its common stock with a par value of $100 for $200 in the market.Which two accounts on the bank's balance sheet are going to be affected?

Accepted Answer

A) Retained earnings and surplus accounts 
B) Subordinated notes and debentures and commons stock outstanding accounts 
C) Retained earnings and common stock outstanding accounts 
D) Common stock outstanding and surplus accounts 
E) Only the common stock outstanding account 
A) Retained earnings and surplus accounts 
B) Subordinated notes and debentures and commons stock outstanding accounts 
C) Retained earnings and common stock outstanding accounts 
D) Common stock outstanding and surplus accounts 
E) Only the common stock outstanding account

Question 8

When a bank serves as a security dealer for certain kinds of securities (mainly federal,state,and local government obligations)the value of these securities is usually recorded in what account on a bank's Report of Condition?

Accepted Answer

A) Investment securities 
B) Taxable and tax-exempt assets 
C) Trading account assets 
D) Secondary reserves 
E) None of the options are correct. 
A) Investment securities 
B) Taxable and tax-exempt assets 
C) Trading account assets 
D) Secondary reserves 
E) None of the options are correct.

Question 9

You know the following information about the Webb State Bank: $\begin{array} { l r } 
\text { Accumulated depreciation } & \$ 40 \
\text { Net loans } & 600 \
\text { Fed Funds purchased and repurchase agreements } & 200 \
\text { Cash and due from banks } & 50 \
\text { Trading account securities } & 40 \
\text { Miscellaneous assets } & 100 \
\text { Deposits } & 500 \
\text { Undivided profits } & 140 \
\text { Gross premises } & 90 \
\text { Surplus } & 40 \
\text { Subordinated debt } & 100 \
\text { Investment securities } & 160 \
\text { Common stock par } & 20 \
\text { Gross loans } & 700
\end{array}$
Given this information,what is the value of this firm's total equity?

Accepted Answer

A) $1,000 
B) $300 
C) $800 
D) $200 
E) $500 
A) $1,000 
B) $300 
C) $800 
D) $200 
E) $500

Question 10

You know the following information about the Webb State Bank: $\begin{array} { l r } 
\text { Accumulated depreciation } & \$ 40 \
\text { Net loans } & 600 \
\text { Fed Funds purchased and repurchase agreements } & 200 \
\text { Cash and due from banks } & 50 \
\text { Trading account securities } & 40 \
\text { Miscellaneous assets } & 100 \
\text { Deposits } & 500 \
\text { Undivided profits } & 140 \
\text { Gross premises } & 90 \
\text { Surplus } & 40 \
\text { Subordinated debt } & 100 \
\text { Investment securities } & 160 \
\text { Common stock par } & 20 \
\text { Gross loans } & 700
\end{array}$
Given this information,what is the value of this firm's total nondeposit borrowings?

Accepted Answer

A) $1,000 
B) $300 
C) $800 
D) $200 
E) $500 
A) $1,000 
B) $300 
C) $800 
D) $200 
E) $500

Question 11

The __________________________ lists the assets,liabilities and equity capital held by the bank on a given date.

Accepted Answer

Report of

Question 12

You know the following information about the Miller State Bank: $\begin{array} { l r } 
\text { Gross loans } & \$ 300 \
\text { Miscellaneous assets } & 50 \
\text { Deposits } & 390 \
\text { Total equity } & 50 \
\text { Common stock par } & 5 \
\text { Non-deposit borrowings } & 60 \
\text { Investment securities } & 150 \
\text { Net premises } & 40 \
\text { Surplus } & 5 \
\text { Allowance for loan losses } & 50 \
\text { Total assets } & 500 \
\text { Gross premises } & 70
\end{array}$
Given this information,what is the value of this firm's total liabilities plus equity?

Accepted Answer

A) $250 
B) $450 
C) $150 
D) $50 
E) $500 
A) $250 
B) $450 
C) $150 
D) $50 
E) $500

Question 13

Each of the following typically falls into the category of loans except:

Accepted Answer

A) real estate. 
B) consumer. 
C) commercial and industrial (business). 
D) agricultural. 
E) municipal. 
A) real estate. 
B) consumer. 
C) commercial and industrial (business). 
D) agricultural. 
E) municipal.

Question 14

Financial statements issued by banks and by nonbank financial-service firms look increasingly similar today.

Accepted Answer

A) True 
 B)False

Question 15

On a bank's income statement (Report of Income)deposit costs are financial inputs.

Accepted Answer

A) True 
 B)False

Question 16

The cost of nondeposit borrowings is a financial input on a bank's income statement or Report of Income.

Accepted Answer

A) True 
 B)False

Question 17

The __________________________ shows the amount of revenues received and expenses incurred over a specific time period.

Accepted Answer

Report of

Question 18

You know the following information about the Taylor National Bank: $\begin{array} { l r } 
\text { Provision for loan losses } & \$ 100 \
\text { Income taxes } & 140 \
\text { Noninterest income } & 500 \
\text { Dividends } & 60 \
\text { Securities gains (losses) } & 50 \
\text { Interest income } & 1,500 \
\text { Noninterest expense } & 750 \
\text { Interest expenses } & 750
\end{array}$
Given this information,what is the value of this firm's net operating income or net income before extraordinary income?

Accepted Answer

A) $150 
B) $210 
C) $400 
D) ($250) 
E) $750 
A) $150 
B) $210 
C) $400 
D) ($250) 
E) $750

Question 19

Fee income arising from fiduciary transactions include all of the following except:

Accepted Answer

A) fees for checking account maintenance. 
B) fees for managing and protecting a customer's property. 
C) fees for recordkeeping for corporate security. 
D) fees for dispersing interest and dividend payments for a corporation. 
E) fees for managing corporate and individual retirement plans. 
A) fees for checking account maintenance. 
B) fees for managing and protecting a customer's property. 
C) fees for recordkeeping for corporate security. 
D) fees for dispersing interest and dividend payments for a corporation. 
E) fees for managing corporate and individual retirement plans.

Question 20

You know the following information about the Miller State Bank: $\begin{array} { l r } 
\text { Gross loans } & \$ 300 \
\text { Miscellaneous assets } & 50 \
\text { Deposits } & 390 \
\text { Total equity } & 50 \
\text { Common stock par } & 5 \
\text { Non-deposit borrowings } & 60 \
\text { Investment securities } & 150 \
\text { Net premises } & 40 \
\text { Surplus } & 5 \
\text { Allowance for loan losses } & 50 \
\text { Total assets } & 500 \
\text { Gross premises } & 70
\end{array}$
Given this information,what the value of this firm's undivided profits?

Accepted Answer

A) $50 
B) $5 
C) $10 
D) $40 
E) $450 
A) $50 
B) $5 
C) $10 
D) $40 
E) $450

Loans and leases are financial outputs on a financial institution's balance sheet or Report of Condition.

Except for commercial banks,savings & loans and savings banks hold the most deposits.

U.S.banks (especially those with $500 million or more in total assets)are required to file financial statements,audited by an independent public accountant,with their principal federal regulatory agency and with the FDIC.

"Painting the tape" refers to the practice whereby banks understate their nonperforming loans.

A bank sells shares of its common stock with a par value of $100 for $200 in the market.Which two accounts on the bank's balance sheet are going to be affected?

When a bank serves as a security dealer for certain kinds of securities (mainly federal,state,and local government obligations)the value of these securities is usually recorded in what account on a bank's Report of Condition?

The __________________________ lists the assets,liabilities and equity capital held by the bank on a given date.

Each of the following typically falls into the category of loans except:

Financial statements issued by banks and by nonbank financial-service firms look increasingly similar today.

On a bank's income statement (Report of Income)deposit costs are financial inputs.

The cost of nondeposit borrowings is a financial input on a bank's income statement or Report of Income.

The __________________________ shows the amount of revenues received and expenses incurred over a specific time period.

Fee income arising from fiduciary transactions include all of the following except:

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

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

The Management of Capital

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

Exam 5: The Financial Statements of Banks and Their Principal Competitors

Loans and leases are financial outputs on a financial institution's balance sheet or Report of Condition.

Except for commercial banks,savings & loans and savings banks hold the most deposits.

U.S.banks (especially those with $500 million or more in total assets)are required to file financial statements,audited by an independent public accountant,with their principal federal regulatory agency and with the FDIC.

"Painting the tape" refers to the practice whereby banks understate their nonperforming loans.

A bank sells shares of its common stock with a par value of $100 for $200 in the market.Which two accounts on the bank's balance sheet are going to be affected?

When a bank serves as a security dealer for certain kinds of securities (mainly federal,state,and local government obligations)the value of these securities is usually recorded in what account on a bank's Report of Condition?

The __________________________ lists the assets,liabilities and equity capital held by the bank on a given date.

Each of the following typically falls into the category of loans except:

Financial statements issued by banks and by nonbank financial-service firms look increasingly similar today.

On a bank's income statement (Report of Income)deposit costs are financial inputs.

The cost of nondeposit borrowings is a financial input on a bank's income statement or Report of Income.

The __________________________ shows the amount of revenues received and expenses incurred over a specific time period.

Fee income arising from fiduciary transactions include all of the following except:

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

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

The Management of Capital

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