CVJI 62.doc

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LESSON 5- ACHIEVEMENT EXAM:FINANCIAL INSTITUTIONS MARKETS AND MONEY
1. The number of us bank charters has been _______but the number of branches has been_______
2. The major form of organization of commercial banks in the U.S. is the:
3. while most us commercial banks are ————–and the _______dominate in term of assets.
4. What balance sheet account of commercial banks is a component of MI?
5. Which on of the following is Not an interest bearing deposit account?
6. Banks general revenue from credit cards from the following Except
7 In a standby letter of credit:
8. A bank expecting interest rate to rise in the future would prefer to make
9.In loan brokerage , the bank’s spread is
10. the largest loan category for commercial banks is:
11 Managing a bank’s maturity GAP is concerned with:
12 A bank can fail two ways-inadequate liquidity and
13 important characteristics of secondary reserves include
14 liability liquidity management assumes
15 maturity GAP is defined as
16 what is the major difference between securities held as secondary reserves and those held for investment?
17 banks liability management is most likely carried out in the ____market
18. Which of the following best describes the trend in bank total capital to all assets?
19. Banks regulators require minimum capital level in banks because.
20 The management of bank interest rate risk has become more important because

TENTH EDITION- FINANCIAL INSTITUTIONS, MARKETS AND MONEY
QUESTION 1
1. RISING, FALLING
2. falling, stable
c. falling, rising
d. rising, rising
2.
a partnership
b. bank holding company
c. single charter
d. branch
3.
a. small, large banks
b. large, large banks
c. small, small banks
d. large,bank holding companies
4..
a. us Treasury deposits
b. Deposit in other banks
c. demand deposit
d. certificate of deposit
5. a. demand deposit
b. now account
c. savings account
d. mmda
6.
a merchant discount fees
b. sale of credit cards
c. annual fees from credit card customers
d. interest from credit card balances
7.
a. the banks eastablishe a liability
b. the bank substitutues its creditworthines for that of its customer
c. the bank assures a loan applicant that credit will soon be granted
d. the banks pays a customer to garantee the bank’s obligations
8.
a. fixed-rate loans
b. long-term, fixed rate loans
c. floating-rate loans adjusted inffrequently
d. floating-rate loans adjusted frequently
9.
a. the difference between the rate earded by the bank and the rate paid by the banks
b. the rate differential beteween the cost of funds and the loan rate
c. the discount of the loand a the windown
d. the fee collected a the maturity of the loan
10.
a. commercial loans
b. real estate loans
c. consumer loans
d. agricultural loans
11.
a. managing a bank’s assets
b. managing a bank’s liabiities
c. manging federal funds
d. managing the relative level of rate-sensitive assets and liabilitis
12. a inadequate reserves
b. inadequate liabilities to fund loans
c. inadequate loans
d. inadequate capital to absorb loses
13.
a. low cost and immediate availablity
b. excellent liquity and interest earning
c. nonearing asset with immediate liquidity
d. high income with low risk
15
a. a rate-sensitive assets dividded by rate -sensitive liabilites
b. fixed-rate assets minus rate- senitive liabilits
c. rate-sensitive liabilites plus rate sensitive assets
d. reat-sensitive assets minus rate sensitive liabilities
16.
a. taxable verssu tax free
b. risk, liquidity and maturity
c. default risk
d. Issuer of the securities
17
a. capital
b mortgage
c. money
d. equity
18.
a capital ratios have trended downward sinc the early 1960s
b. cpaital rations have increased steadily since the 1960s
c. after a length decline since the 1960s , bank capital ratios have been increasing since the late 1980s
d. after a steady decline throught the 1960s, bank capital ratios have been increasing sinc e the early 1970s
19.
a. they are interested in maximizing the value of the bank shareholders’ equity
b. they are concerned about the failure of a bank
c. they are concerned about the falure of on bank underminiing the confidence in all banks
d. bank regulatory agencies receive a proportion of bank capital each year to fund the their operations
20.
a. regulators are concerned about interest rate risk
b. of increased interest rate variability in financial markets
c. the banks are deriviing a greater proportion of their revenue from interest revenue.
d. the proportion of interest-bearing liabilities has been decreasing over time