5. Suppose that HonkeyDoodah Bank has total assets of $200 million. It has deposits of $100 million, owes $20 million to other banks in Fed Funds loans, and has $50 million in bonds outstanding. Those are all of the banks liabilities. Using the balance sheet identity, what is HonkeyDoodahs Leverage Ratio?

A. 2

B. 6 2/3

C. 10

D. $30 million

E. None of the above

6. What are the lowest-rated corporate bonds that banks are allowed to purchase?

A. Aaa B. Aa C. Baa D. B E. Banks are not allowed to purchase corporate bonds

7. What was the real reason why the Glass-Steagall Act of 1933 separated commercial banking from investment banking?

A.To counteract the decrease in the money supply B.Because investment banking is too risky for commercial banks to undertake C.Because the gold standard was suspended that year D.To punish the financial industry E.All of the above