MUST ANSWER ALL 3 for thumbs up

1. Which of the following statements is not true regarding agency problems between a bank's managers and its shareholders?

a. Decisions that result in growth may be intended to increase employee salaries.

b. The compensation to a bank's loan officers may be tied to loan volume, which encourages the loan department to provide loans without concern about risk

c. Managers are rarely tempted to make decisions that are in their own best interests rather than shareholder interests

d. To prevent agency problems, some banks provide stock as compensation to managers.

e. All of these choices are true with respect to agency problems.

2.

If a bank obtains a relatively large portion of its funds from conventional demand deposits, interest expenses should be relatively ________, while its noninterest expenses should be relatively ________.

a. high; low

b. high; high

c. low; low

d. low; high

e. None of these choices are correct.

3. Which of the following is not an advantage of a bank acquisition?

a. Some banks may be able to achieve economies of scale by acquiring other banks.

b. Bank acquisitions can remove redundant operations.

c. An acquiring bank may have some managerial advantages over a target, which should allow the acquirer to improve the target's performance after the acquisition.

d. Bank acquisitions can achieve diversification benefits as the acquirer can offer loans in some new industries.

e. All of these choices are advantages of bank acquisitions.