Question 11 pts

For banks in the U.S., ROEs, on average, are far higher than ROAs.

Group of answer choices

True

False

Flag question: Question 2Question 21 pts

As the government imposes a higher capital ratio requirement, the ROE at banks inevitably goes _________.

Group of answer choices

down

sideways

up and then down

up

Flag question: Question 3Question 31 pts

Average ROEs for banks have been on a __________ trend since 2008.

Group of answer choices

sideways

downward

upward

Flag question: Question 4Question 41 pts

From the list below, find one that is not a bank risk management practice.

Group of answer choices

liability management

liquidity management

HR management

capital adequacy management

Flag question: Question 5Question 51 pts

Given the balance sheet,

Assets Liabilities_______

Reserves $20 m Deposits $100 m

Loans $80 m Bank Capital $10 m

Securities $10 m

Fill out the new balance sheet below after a deposit withdrawal of $10 m is paid out from the Reserves.

Assets Liabilities_______

Reserves $_A_ m Deposits $_B_ m

Loans $___ m Bank Capital $___ m

Securities $___ m

Group of answer choices

A $20 m: B $100 m

A $10m: B $100 m

A $0: B $100 m

A $10 m: B $90 m

Flag question: Question 6Question 61 pts

Starting with the bank balance sheet below, where currently, the bank required reserve ratio is 10%.

Assets Liabilities_______

Reserves $10 m Deposits $100 m

Loans $90 m Bank Capital $10 m

Securities $10 m

Now, a $10 million deposit is withdrawn. What is the new required deposit amount?

Group of answer choices

$8 m

$90 m

$10 m

$9 m

Flag question: Question 7Question 71 pts

Assets Liabilities_______

Reserves $20 m Deposits $100 m

Loans $80 m Bank Capital $10 m

Securities $10 m

What is the capital ratio of this institution?

Group of answer choices

less than 10 %

10%

higher than 10%

7%

Flag question: Question 8Question 81 pts

Assets Liabilities_______

Reserves $20 m Deposits $100 m

Loans $80 m Bank Capital $10 m

Securities $10 m

In meeting a $10 million dollar deposit withdrawal request, which action below is not feasible for this bank to undertake?

Group of answer choices

sell loans

sell bank capital

use reserves

sell securities

Flag question: Question 9Question 91 pts

Select one banking activity that is becoming less important?

Group of answer choices

interest income earning activities

off balance sheet activities

securitization

loan servicing

Flag question: Question 10Question 101 pts

Which is not an important measure of banking performance?

Group of answer choices

ROE

ROA

NIM

EPS