Question
Economies of scale are evident in: Group of answer choices credit card lending farm lending wholesale banking universal banking Deregulation of banks refers to Group
Economies of scale are evident in:
Group of answer choices
credit card lending
farm lending
wholesale banking
universal banking
Deregulation of banks refers to
Group of answer choices
prices (e.g. interest paid on time deposits)
products (e.g., investment banking)
geographic location
all of the above
The operating efficiency ratios calculated to provide information on cost control include all of the following EXCEPT:
Group of answer choices
depository ratio
occupancy ratio
wages and salaries expense rate
interest expense ratio
Decreasing the amount of liquid assets held for the purpose of meeting loan demands and deposit withdrawals and increasing the usage of deposit and nondeposit sources of funds paying market rates of interest is known as:
Group of answer choices
liquidity management
leverage adjustment
liability management
d. liquidity adjustment
Risk-based capital rules cause banks to favor:
Group of answer choices
GO municipal bonds
revenue bonds
all municipal bonds
no municipal bonds
Default risk on bonds can be evaluated by using:
Group of answer choices
financial analysis
bond ratings
estimates of potential losses on bonds
a and b
Efficiency ratios measure how well a firm is using its
Group of answer choices
financial capital
personnel
assets and liabilities
financial leverage
The difference between current assets and current liabilities is
Group of answer choices
current ratio
retained earnings
net income
net working capital
Times interest earned is a measure of the
Group of answer choices
operational earnings of the firm (EBIT) compared to annual interest payments
net earnings after taxes compared annual interest payments
net earnings before taxes compared to annual interest payments
gross profit compared to annual interest payments
A loan commitment is
Group of answer choices
an irrevocable promise by the bank to a borrower to extend credit
an agreement between a bank and a borrower that the bank may extend credit under certain conditions
a form of a standby letter of credit
none of the above
The term character in the Cs of credit refers to
Group of answer choices
the borrowers physical characteristics
the borrowers attitudes about banks and loans
the borrowers reputation, honesty, and integrity
the borrowers representations about collateral
Covenants in loan agreements are used to
Group of answer choices
secure collateral
make representations in agreements
control the borrowers behavior
as guaranties
The prime rate is
Group of answer choices
the base rate on consumer loans
the base rate on international loans
the base rate conventional loans
none of the above
Performance pricing links the price of a loan to
Group of answer choices
the financial condition of the borrower
the prime rate
LIBOR
A floating rate
The principal risks associates with real estate lending are:
Group of answer choices
declining values
defaults
lack of liquidity
all of the above
Most mortgage loans in the United States are:
Group of answer choices
ARMS
fixed rate, partially amortized
fixed rate, fully amortized, level payment
GEMS
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