1In a rising rate environment, banks will quickly reprice ___________ and slowly reprice ____________. This gap in timing will help __________ the Bank's spread.

Interest Bearing Deposits ; Earning Assets; Expand

Earning Assets ; Interest Bearing ; ExpandDeposits

2The use of "Fed Funds Purchased" directly creates Interest Income for the Bank.

True

False

3Imagine there are two banks with identical yields and costs. Bank A puts 50% of its money into cash and 50% into the security portfolio. Bank B keeps 100% of its available funds in the Vault (it's a very big vault, clearly).

Which bank will report the higher revenue?

Bank A

Bank B