Exam 10: Banking and the Management of Financial Institutions

Bank capital is equal to ________ minus ________.

For a given return on assets,the lower is bank capital,

Long-term customer relationships ________ the cost of information collection and make it easier to ________ credit risks.

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

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

Most of a bank's operating income results from

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

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

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

Credit risk management tools include

Which of the following would not be a way to increase the return on equity?

When $1 million is deposited at a bank,the required 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,

Bank reserves include

When a bank suspects that a $1 million loan might prove to be bad debt that will have to be written off in the future the bank

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

Assume a bank has $200 million of assets with a duration of 2.5,and $190 million of liabilities with a duration of 1.05.The duration gap for this bank is

When a $10 check written on the First National Bank of Chicago is deposited in an account at Citibank,then

Which of the following statements is false?

If the First National Bank has a gap equal to a negative $30 million,then a 5 percentage point increase in interest rates will cause profits to

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