商业银行管理彼得S罗斯英文原书第8版英语试题库Chap011.docx

商业银行管理彼得S罗斯英文原书第8版英语试题库Chap011.docx

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商业银行管理彼得S罗斯英文原书第8版英语试题库Chap011

Chapter11

LiquidityandReservesManagement:

StrategiesandPolicies

FillintheBlankQuestions

1.A（n）__________________isanassetwhichcanbeconvertedintocasheasily,whichhasarelativelystablepriceandisreversiblesothatthesellercanrecovertheiroriginalinvestmentwithlittleriskofloss.

Answer:

liquidasset

2.Whenafinancialinstitutionsellsassetstomanageliquidityitfaces_________________________.Theylosethefutureearningsonthoseassets,theyfacetransactioncostsonthosesalesandtheassetsmosteasilysoldoftenhavethelowestreturn.

Answer:

opportunitycosts

3._________________________iswhenthefinancialinstitutionborrowsmoneyinthemoneymarkettomeettheirliquidityneeds.

Answer:

Purchased（borrowed）liquidity

4.The_________________________isthetotaldifferencebetweenitssourcesandusesoffunds.

Answer:

liquiditygap

5._________________________arethedepositsandotherborrowingsofthebankwhichareveryinterestsensitiveorwherethebankissuretheywillbewithdrawnduringthecurrentperiod.

Answer:

"Hotmoney"liabilities

6.The_________________________istheideathatmanagementshouldmakeallgoodloansandcountonitsabilitytoborrowfundsifitdoesnothavetheliquiditytomeetitscashneeds.

Answer:

customerrelationshipdoctrine

7._________________________aretheassetsthebankmustbylawholdbehinditsdeposits.IntheU.S.onlyvaultcashanddepositsheldwiththeFederalReservescanbeusedtomeettheserequirements.

Answer:

Legalreserves

8.A（n）_________________________istheaccountthebankmusthaveattheFederalReservetocoveranychecksdrawnagainstthebank.

Answer:

clearingbalance

9.A（n）_________________________isaservicedevelopedbybankswherethebankshiftsmoneyoutofaccountswithreserverequirementsandintosavingsaccountsovernight.

Answer:

sweepsaccount

10.The_________________________isa14dayperiodstretchingfromaThursdaytoaWednesday.Thisistheperiodinwhichthebankhastokeeptheiraveragedailylevelofrequiredreservesforaparticularcomputationperiod.

Answer:

reservemaintenanceperiod

11._________________________istheavailabilityofcashintheamountneededatareasonablecost.

Answer:

Liquidity

12.Theoldestapproachtomeetingliquidityneedswhichreliesonthesaleofliquidassetstomeetliquiditydemandsiscalled_________________________.

Answer:

assetliquiditymanagement

13.Undera_________________________strategysomeoftheexpecteddemandsforliquidityarestoredinassets,whileothersarebackstoppedbyarrangementsforlinesofcreditfrombanksorothersuppliersoffunds.

Answer:

balancedliquiditymanagement

14.A（n）_________________________isthepersoninthebankresponsibleforthebank'scashpositionandmeetinglegalreserverequirements.

Answer:

moneypositionmanager

15.ThemethodusedintheU.S.todetermineabank'slegalreserverequirementinwhichtheperiodforholdinglegalreservesfollowstheperiodusedtocalculatetherequiredamountoflegalreservesiscalled_________________________.

Answer:

laggedreserveaccounting

16.Thefedfundsrateisgenerallymostvolatileonbank__________day.

Answer:

settlement

17.Manydepositoryinstitutionshold__________balances（extrareserves）tohelppreventoverdraftpenalties.

Answer:

precautionary

18.Notall_______banksaroundtheworldhavereserverequirements.

Answer:

central

19.Forseveraldecades,thelargestbanksaroundtheworldhavechosenwhichcallsforborrowingimmediatelyspendablefundstocoverallanticipateddemandsforliquidity.

Answer:

liabilitymanagement

20.Theapproachtomanagingliquiditystartswithtwosimplefacts,liquidityrisesasdepositsincreaseandloansdecreaseandliquidityfallswhendepositsfallandloansincrease.

Answer:

sourcesandusesoffunds

21.Intheapproachtomanagingliquiditydepositsandothersourcesoffundsaredividedintocategoriesandthenliquiditymanagersmustsetasideliquidfundsaccordingtosomedesiredoperatingrule.

Answer:

structureoffunds

22.Manyfinancialserviceinstitutionsestimatetheirliquidityneedsbaseduponexperienceandindustryaverages.Thisapproachtomanagingliquidityiscalledtheapproach.

Answer:

liquidityindicator

23.Manyanalystsbelievethereisonlyonesoundmethodforassessingafinancialinstitution’sliquidityneeds.Thismethodcenterson.

Answer:

disciplineofthefinancialmarketplace（signalsfromthemarketplace）

24.ThefordepositsandotherreservableliabilitiesandforvaultcashholdingsisatwoweekperiodextendingfromTuesdaytoaMondaytwoweekslater.

Answer:

reservecomputationperiod

25.Iftotallegalreservesheldaregreaterthanrequiredreservesthebankhas.

Answer:

excessreserves

26.Iftotallegalreservesheldarelessthanrequiredreservesthebankhas.

Answer:

areservedeficit

27.Theiswhereamoneypositionmanagercancoveralargereservedeficitquickly.Itisusuallyoneofthecheapestplacestoborrowbutisalsofrequentlyvolatile.

Answer:

federalfundsmarket

28.Oneoftheratiosusedintheliquidityindicatorapproachtomanagingafinancialinstitution’sliquidityneedsis.Thisratioiscashandduefromdepositoryinstitutionsdividedbytotalassetswhereagreaterratioindicatesastrongerliquidityposition.

Answer:

cashpositionindicator

True/FalseQuestions

TF29.Liquidassetsmusthaveareasonablystablepricesothatthemarketisdeepenoughtoabsorbthesalewithoutasignificantlossofvalue.

Answer:

True

TF30.Assetliquiditymanagement（orassetconversion）involvesstoringliquidityinassets,suchasdepositsandjumboCDs.

Answer:

False

TF31.Assetliquiditymanagement（orassetconversion）involvesstoringliquidityinassets,suchascashandmarketablesecurities.

Answer:

True

TF32.Liquidassetsgenerallyhaveastablepricebutarenotnecessarilyreversible.

Answer:

False

TF33.Assetconversionisconsideredtobeacostlessapproachtoliquiditymanagement.

Answer:

False

TF34.Oneprincipleofsoundbankliquiditymanagementistobesuretosellfirstthoseassetswiththeleastprofitpotential.

Answer:

True

TF35.Borrowedliquidity（liability）managementislessriskyforafinancialinstitutionthanisassetconversion.

Answer:

False

TF36.Afinancialinstitution'sliquiditygaprepresentsthedifferencebetweenitssourcesandusesofliquidfunds.

Answer:

True

TF37.Abankexpectstoloseits"hotmoney"liabilities,accordingtothetextbook.

Answer:

True

TF38.Accordingtothecustomerrelationshipdoctrineabankshouldturndownanyloanrequestsforwhichitdoesnothaveenoughdepositsonhandbutshouldhelpitsborrowingcustomerobtainfundsfromsomeothersource（suchasbyissuingaletterofcredittobackstopthecustomer'sloanfromanotherlender）.

Answer:

False

TF39.AU.S.bankcanrunuptoa5-percentdeficitinitslegalreserverequirementwithoutincurringaninterestpenaltyfromtheFederalReserveSystem.

Answer:

False

TF40.Mostliquidityproblemsinbankingarisefrominsideabank,notfromitscustomers.

Answer:

False

TF41.HoldingsofliquidassetsatU.S.bankshaveexperiencedagradualdeclineinrecentyears.

Answer:

True

TF42.TheFederalReservehasbeenloweringdepositreserverequirementsinrecentyears.

Answer:

True

TF43.Theliquidityindicator,coredepositsdividedbytotalassets,isameasureofstoredliquidity.

Answer:

False

TF44.Abank'smoneypositionmanagerisresponsibleforinsuringthatthebankmaintainsanadequateleveloflegalreserves.

Answer:

True

TF45.IfabankintheUnitedStatesrunsalegalreservedeficitofmorethan2percentofitsrequireddailyaveragelegalreservepositionitwillbeassessedaninterestpenaltyequaltotheFederalReserve'sdiscountrateplus5percent.

Answer:

False

TF46.Ifabankreceivesmorechecksdepositedtotheaccountsitholdsthanchecksdrawnagainstitsdepositaccounts,thebank'slegalreserveswilltendtoincrease.

Answer:

True

TF47.Accordingtothetextbookifabank'sliquiditydeficitisexpectedtolastforonlyafewhours,thefederalfundsmarketorthecentralbank'sdiscountwindowisnormallythepreferredsourceoffunds.

Answer:

True

TF48.Banksmakingheavyuseofborrowedsourcesofliquiditymustwrestlewiththeproblemofinterestcostuncertainty,accordingtothetextbook.

Answer:

True

TF49.Allcentralbanksimposereserverequirementsonthebankstheyregulate.

Answer:

False

TF50.Thesourcesandusesoffundsmethodofestimatingabank'sliquidityrequirementsdividesthebank'sliabilitiesintothreetypes（hotmoney,vulnerablefundsandstablefunds）andestimatestheprobabilityofeachbeingwithdrawnfromthebank.

Answer:

False

TF51.Oneoftheproblemswithliquiditymanagementforabankisthatrarelydoesthedemandforfundsequalthesupplyoffundsatagiventime.

Answer:

True

TF52.Oneoftheproblemswithliquiditymanagementforabankisthatthereisatrade-offbetweenbankliquidityandprofitability.

Answer:

True

TF53.Theliquidityproblemforbanksismadeeasierbecausemostoftheirliabilitiesarenotsubjecttoimmediaterepayment.

Answer:

False

TF54.Theliquidityproblemforbanksismadeeasierbecausedepositorsandborrowersarenotsensitivetochanginginterestrates.

Answer