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