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Which actions by banks ensure that reserves are adequate to cover deposit outflows? A.Liquidity management B.Customer relations managment C.Liability management D.Asset management QUESTION 2 Suppose
- Which actions by banks ensure that reserves are adequate to cover deposit outflows?
- A.Liquidity management
- B.Customer relations managment
- C.Liability management
- D.Asset management
QUESTION 2
- Suppose a bank has $500million in deposits and reserves of $80million.If the required reserve ratio is 10percent,what is the excess reserve level for this bank?
- A.$0
- B.$30 million
- C.$50 million
- D.$80 million
QUESTION 3
- Which of the following actions cannot be used by banks to increase reserves?
- A.Call loans
- B.Sell loans
- C.Buy Treasury debt
- D.Sell Treasury debt
QUESTION 4
- How are checkable deposits counted on a bank's balance sheet?
- A.Asset
- B.Liability
QUESTION 5
- One of our banks has three loan officers --one officer handles home and personal loans,oneofficer handles commercial or business loans, and one officer handles agricultural loans.This practice is a form of credit risk management known as:
- A.Specialization in lending
- B.Restrictive covenants
- C.Screening
QUESTION 6
- The benefit of establishing a long-term relationship with your banker is to:
- A.Reduce the likely of moral hazard
- B.Diminish problems with asymmetric information
- C.Improve loan terms for the customer
- D.All of the above
QUESTION 7
- First National Bank has assets that are more rate-sensitive than its liabilities.As interest rates rise,then we should expect the bank profits to:
- A.Remain unchanged
- B.Fall
- C.Rise
QUESTION 8
- Which is the riskier action for a bank?
- A.Making foreign exchange trades on behalf of customers
- B.Making foreign exchange trades with bank assets
QUESTION 9
- Governments require some banks to conduct stress tests of their financial situation.What type of financial regulation is this requirement?
- A.Disclosure requirements
- B.Assessment of risk management
- C.Consumer protection
- D.Restrictions on competition
QUESTION 10
- Why are some banks considered too big to fail?
- A.These banks are so large that their failure may initiate a financial crisis in the broader economy
- B.Very large banks have enough assets to prevent financial distress and cannot fail
- C.The Glass-SteagalAct prohibits the failure of any bankwihtmore than $5 billion in assets
- D.Congress has always stepped in to bail out banks owned by politically connected individuals
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