1. The largest item on the combined balance sheet of US commercial banks is:

Select one:

a. Cash

b. Securities

c. Loans

2.

There is an inverse relationship between the level of a banks equity capital and its most common measure of profitability.

Select one:

True

False

3.

Nonfinancial firms finance the vast majority of their investment through:

Select one:

a. Banks

b. Internal funds

c. Financial markets