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Question 11 19. Which of the following would be the best example of a ratio used to examine the bank's interest rate risk? Not yet answered Marked out of 1.00 P Flag question Select one: O a. Interest sensitive assets/ interest sensitive liabilities O b. Demand deposits/ total assets c. Interest on time deposits/ total time deposits O d. Interest on real estate loans/ total real estate loans Question 12 2. ROE for a bank is calculated by: Not yet answered Marked out of 1.00 P Flag question Select one: O a. Dividing total operating revenue less operating expenses by total assets. O b. Dividing net after-tax income by total equity capital. O c. Deducting total interest expenses from total interest income and dividing by total equity capital. O d. Noninterest income less noninterest expenses divided by total earning assets. O e. None of the above. Question 13 Not yet answered 20. A bank expects to pay a dividend next year of $3.45 and also expects dividends to grow at a rate of 7% from now on. If the appropriate discount rate is 15%, what should this bank's stock price be in the market? Marked out of 1.00 Select one: O a. $49.29 P Flag question O b. $23.00 O c. $24.61 O d. $43.13 O e. $46.14 Question 14 3. The difference between such sources of bank income as service charges on deposits and trust-service fees and such sources of bank expenses as salaries and wages and overhead expenses divided by total assets or total earning assets is called the: Not yet answered Marked out of 1.00 Select one: O a. Net noninterest margin O b. Net return on assets P Flag question O c. Net profit margin O d. Net operating margin O e. None of the above Question 15 4. A bank's ROE equals its ROA times its: Not yet answered Marked out of 1.00 P Flag question Select one: a. Ratio of net after-tax income to total operating revenues O b. Total operating revenues divided by total assets O c. Total assets divided by total equity capital O d. Net profit margin O e. None of the above Question 16 5. The earnings spread for a bank is equal to: Not yet answered Marked out of 1.00 Select one: O a. Total cash and noncash expenses subtracted from interest and noninterest income divided by total assets O b. Total operating revenues less total operating expenses divided by total assets O c. Total interest income divided by total earning assets less total interest-expense divided by total interest-bearing bank liabilities P Flag question O d. None of the above O e. Total interest income less total interest expenses divided by earning assets Question 17 6. The so-called employee productivity ratio for a bank is equal to: Not yet answered Marked out of 1.00 P Flag question Select one: a. None of the above. O b. Net operating revenue less total interest expenses per employee O c. Net operating income per full-time-equivalent employee O d. Total operating earnings less salaries and wages expense per employee O e. Total interest and noninterest expense per employee Question 18 7. According to the textbook the most profitable banks in the United States in 2007 fell in the asset size range of: Not yet answered Marked out of 1.00 P Flag question Select one: O a. Under $100 million in total assets b. Over $10 billion in total assets O c. None of the above O d. Under $25 million in total assets e. Between $100 million and $10 billion in total assets Question 19 8. A bank's stock price will tend to rise if the: Not yet answered Marked out of 1.00 Select one: O a. None of the above P Flag question O b. The banking organization's perceived level of risk has fallen Expected dividends increase, while perceived level of risk declines C. All of the above d. Value of the stream of future stockholder dividends is expected to increase Question 20 9.The ratio that equals total interest income divided by total earning assets less total interest expense divided by total interest- bearing liabilities is known as the: Not yet answered Marked out of 1.00 Select one: O a. Net income margin p Flag question O b. Earnings base O c. None of the above O d. Earnings spread O e. Net return prior to special transactions