bank balance sheet MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If a bank grants you a mortgage, the mortgage is 1) _________ A) an asset to you as well as an asset to the bank. B) a liability to you as well as a liability to the bank. C) a liability to you, but an asset to the bank. D) an asset to you, but a liability to the bank. 2) Which of the following assets is the most liquid? 2) _________ A) washing machine B) money market mutual fund C) computer D) U.S. Treasury bond 3) Financial securities that represent partial ownership of a corporation are known as 3) _________ A) cheques B) dividends. C) bonds. D) stocks. 4) If you purchase a Treasury bond, the Treasury bond is 4) _________ A) an asset to you, but a liability to the U.S. government. B) a liability to you, but an asset to the U.S. government. C) an asset to you as well as an asset to the U.S. government. D) a liability to you as well as a liability to the U.S. government. 5) A balance sheet 5) _________ A) is a statement listing the tax liabilities incurred by an individual or a firm. B) is a statement showing an individual's or a firm's financial position at a particular point in time. C) can be constructed for any nonfinancial firm, but cannot be constructed for a financial firm. D) is a statement showing an individual's or a firm's income over a period of time. 6) On a bank's balance sheet, assets are 6) _________ A) the sources of acquired funds. B) those items owed by the bank to depositors and others. C) the uses of acquired funds. D) by definition equal to the bank's liabilities. 7) On a bank's balance sheet, liabilities are 7) _________ A) the uses of acquired assets. B) by definition equal to the bank's assets. C) all those items of value owned by the bank. D) the sources of acquired funds. 8) Bank capital is equal to 8) _________ A) the value of the capital originally invested in the bank by its owners. B) the value of the buildings and other physical assets the bank owns. C) the difference between the value of the bank's assets and the value of its liabilities. D) the value of everything the bank owns. 9) Which of the following is a bank liability? 9) _________ A) consumer loans B) securities C) reserves D) nontransaction deposits 10) Banks earn profits by selling ________ with aractive combinations of liquidity, risk, and return, and using the proceeds to buy ________ with a different set of characteristics. 10) ________ A) loans; deposits B) securities; deposits C) liabilities; assets D) assets; liabilities