罗斯商业银行管理习题Chap006.docx

罗斯商业银行管理习题Chap006.docx

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罗斯商业银行管理习题Chap006

Chapter06

MeasuringandEvaluatingthePerformanceofBanksandTheirPrincipalCompetitors

FillintheBlankQuestions

1.

Theequitymultipliermeasurestheamountof_____________________forabankandisoneprincipalcomponentofthebank'sROE. 

________________________________________

2.

__________________________riskisonethatdealswiththequalityofthebank'sassetsand,inparticular,thebank'sloans. 

________________________________________

3.

Aphenomenonwhereininterestratesandsecuritypricesinthefinancialmarketplacemoveagainstatroubledfirm,forcingittomakecrucialadjustmentsinpoliciesandperformanceinordertocalminvestors'worstfearsisoftenreferredtoas__________________byeconomists. 

________________________________________

4.

__________________________assetsofafinancialinstitutionarethosethatwillmatureorberepricedwithinasetperiodoftime. 

________________________________________

5.

__________________________istheriskthatthevalueofthefinancialinstitution'sassetportfoliowilldeclineduetofallingmarketprices. 

________________________________________

6.

Forabank,sourcesoffundslikeEurodollars,Fedfunds,repurchaseagreements,andlargeCDsarecategorizedas____________________. 

________________________________________

7.

__________________________istheriskthatafinancialinstitutionmaynotbeabletomeettheneedsforcashofitsdepositors. 

________________________________________

8.

__________________________assets,includingloans,arethosewhicharepastdueby90daysormore. 

________________________________________

9.

OneoftheprincipalcomponentsofevaluatingROEis_____________________ratio,whichreflectsabank'sportfoliomanagementpoliciesandthemixandyieldonitsassets. 

________________________________________

10.

__________________________reflectstheeffectivenessoftheexpensemanagementofabankandisoneoftheprincipalcomponentsofevaluatingROE. 

________________________________________

11.

__________________________measuresthereturntostockholdersontheirinvestmentinabank.Itistheproductofnetprofitmargin,assetutilization,andtheequitymultiplier. 

________________________________________

12.

__________________________measurestheamountofdebtorleverageabankhasandisonepartoftheevaluationofthebank'sROE.Itisgenerallyanumberlargerthanone. 

________________________________________

13.

The__________________________isastandardizedreportprovidedbyfederalregulatorswhichreportsthebalancesheet,incomestatement,andotherdataforallfederallysupervisedbanks.Italsocontainsinformationonpeerinstitutions. 

________________________________________

14.

Thecumulativeimpactofalltherisks（marketrisk,creditrisk,operationalrisk,andlegalandcompliancerisk）puttogetherthatcanaffectafinancialfirm'slong-runsurvivalisoftenreferredtoas_________________________. 

________________________________________

15.

__________________________istheriskthatshiftinginterestratesinthemarketwilladverselyaffectafinancialinstitution'snetincomeorthevalueofitsassetsorequity. 

________________________________________

16.

The____________________Actrestrictscombinedauditingandconsultingrelationshipsinordertopromoteauditorindependenceandobjectivity. 

________________________________________

17.

________________________isoneofthemostwidelyrespectedprivateinstitutionsthatratesthecreditqualityoffinancialinstitutions. 

________________________________________

18.

________________________referstotheuncertaintyregardingafinancialfirm'searningsduetofailuresincomputersystems,errors,misconductbyemployees,lightningstrikes,andsimilarevents. 

________________________________________

19.

________________________referstovariabilityinearningsresultingfromactionstakenbythelegalsystemincludingunenforceablecontracts,lawsuits,andadversejudgements. 

________________________________________

20.

________________________includesviolationsofrulesandregulations.Itcanincludefailuretoholdadequatecapitalwhichcanleadtocostlycorrectiveactions. 

________________________________________

21.

________________________istheuncertaintyassociatedwithpublicopinion.Negativepublicity（whethertrueornot）canaffectafinancialfirm'searningsbydissuadingcustomersfromusingtheservicesoftheinstitution. 

________________________________________

22.

Asdataprocessingoffinancialinformationbecomesmoreimportant,managersoffinancialfirmscanrealizecostsavingsfrom_______________________,transferringtasksfrominsidethefirmtootherfirmsspecializingininformationtechnology. 

________________________________________

23.

Oneofthetraditionalmeasuresofearningsefficiencyis________________________ortotalinterestincomeovertotalearningsassetslesstotalinterestexpensesovertotalinterestbearingbankliabilities.Itmeasurestheeffectivenessofafirm'sintermediationfunctionintheborrowingandlendingofmoney. 

________________________________________

24.

OnepartofROEis________________________ornetincomedividedbypre-taxnetoperatingincome,whichmeasuresafinancialfirm'suseofsecuritygainsandlossesandothertaxmanagementtoolstominimizetaxexposure. 

________________________________________

25.

Netprofitmargincanbesplitintotwoparts,________________________andtaxmanagementefficiency.Thefirstpartispre-taxnetoperatingincomeovertotaloperatingrevenuewhichlooksathowmanydollarsofrevenuesurviveafteroperatingexpensesareremoved. 

________________________________________

True/FalseQuestions

26.

Financialinstitutionsthatpursuethe"quietlife"asagoalfacelessriskoflosingearningsormarketshare. 

True    False

27.

Basicprinciplesoffinancialmanagementsuggestthatattemptingtomaximizeabank'sstockvalueisthekeyobjectiveforbankswhichshouldhavepriorityoverallothergoals. 

True    False

28.

Iftheexpectedstreamoffuturedividendsforabank'sshareholderrises,thebank'sstockpriceshouldalsorise,otherfactorsheldconstant. 

True    False

29.

Ifthediscountfactorassociatedwiththevalueofabank'sstockrises,thebank'sstockpriceshouldrise,otherfactorsheldconstant. 

True    False

30.

Abank'sROAequalsitsROEtimestheratiooftotalassetsdividedbytotalequitycapital. 

True    False

31.

Accordingtothetextbook,abank'sasset-utilizationratioreflectsthemixandyieldonabank'sportfolioofassets. 

True    False

32.

Abank'sprofitmarginorratioofnetafter-taxincometototaloperatingrevenueisameasureoffinancialleverageforabank. 

True    False

33.

Accordingtothetext,theratioofabank'snetafter-taxincometopre-taxnetoperatingincomeisameasureoftaxmanagementefficiency. 

True    False

34.

Accordingtothetextbook,theratioofabank'spre-taxnetoperatingincometototaloperatingrevenuesisameasureofexpense-controlefficiency. 

True    False

35.

Theratioofnon-performingassetstototalloansandleasesisameasureofcreditriskinbankingindustry. 

True    False

36.

Oneofthemeasuresofabank'sefficiencyandreturnis"earningsspread".Itiscalculatedbytheratiooftotalinterestincometototalliabilitiesasreducedbytheratiooftotalinterestexpensestototalassets. 

True    False

37.

Inrecentyears,theU.S.bankingindustry'sequitymultiplierhasgenerallyriseninresponsetoregulatorypressuretoraisemorecapital. 

True    False

38.

Ifabankaddsmorefull-timeemployeesandpoststhesamenetoperatingincome,itsemployeeproductivityratio,asdefinedinthetext,mustfall. 

True    False

39.

Accordingtothetextbook,themostprofitableU.S.banksintermsofbothROAandROEaremedium-sizeinstitutionsintheassetsizerangeof$100millionto$10billion. 

True    False

40.

ROAmeasureshowcapablythemanagementofafinancialinstitutionhasbeenconvertingtheinstitution'sassetsintonetearnings. 

True    False

41.

Thenoninterestmarginisgenerallypositiveformostbanks. 

True    False

42.

Theratioofnonperformingassetstototalloansandleasesisconsideredtobeameasureofabank'smarketrisk. 

True    False

43.

Charge-offsrepresentthesecuritiesabankdecidestosellbecausetheyhavedeclinedinvalue. 

True    False

44.

Loanspastduefor90daysormoreareclassifiedasnonperformingassets. 

True    False

45.

Theratioofcashandgovernmentsecuritiestototalassetsisconsideredtobeameasureofliquidityriskinbanking. 

True    False

46.

Theratioofuninsureddepositstototaldepositsisconsideredtobeameasureofcreditriskinbanking. 

True    False

47.

Theinterestratespreadbetweenmarketyieldsonbankdebtissues（suchascapitalnotesandCDs）andthemarketyieldsongovernmentsecuritiesofthesamematurityisconsideredtobeameasureofmarketriskinbanking. 

True    False

48.

Theratioofabank'snetoperatingincometothenumberofabank'sfull-time-equivalentemployeesisc