Multiple choice (30 points) These statements are True or False? (2.5 points/correct answer) 1. Commercial banks can not provide demand deposit accounts to clients. 2. Loans and leases are financial outputs on a financial institution's Income Statement. 3. Charged off are deducted from the Provision for Loan Losses (PLL) account on a bank's income statement. 4. Off-balance-sheet items for a bank are fee generating transactions which are recorded on their balance sheet. 5. The role performed by banks in which they stand behind their customers when those customers are unable to pay a debt obligation is known as the guarantor role. 6. The letter A in the CAMELS rating system for banks refers to the Asset quantity of a bank. 7. Consumer loans appear to have strong sensitivity to the business cycle, change significantly through both recessions and expansions. 8. Increased competition, following deregulation, has led to a decline in banks net interest margin 9. Relative to larger banks, smaller banks rely less on non-interest income as a source of revenue. 10. The borrower Y has achieved higher earnings each year for the past six years. This is Collateral in 6Cs when analyzing clients. 11. The borrower X has asked for a type of loan its lender normally refuses to make. This is Condition in 6Cs when analyzing clients 12. The borrower Z has an excellent credit rating. This is Capacity in 6Cs when analyzing clients