《商业银行经营学》复习提纲习题.docx

1、商业银行经营学复习提纲习题1、 Fill in the Blank Questions(1 point for each)(1) _ is a newer service provided by banks where the bank lends money to individuals for the purchase of durable and other goods. (2) The loosening of government regulation and control of financial institutions is called _ . (3) A bank whi

2、ch now offers all of the available financial services is known as a _bank. (4) A(n) buys and sells securities on behalf of their customers and for their own accounts. Examples of this type of financial service provider include Merrill Lynch and Charles Schwab.(5) One tool that the Federal Reserve us

3、es to control the money supply is _. The Federal Reserve will buy and sell T-bills when they are using this tool of monetary policy. The federal bank regulatory agency which examines the most banks is the _. (6) The short term securities of the bank, including T-Bills and commercial paper, are often

4、 called _ because they are the second line of defense to meet demands for cash. Answer: (7) A(n)_ is a deposit account which pays an interest rate competitive with money market mutual funds and which generally has limited check writing ability. _ can be held by individuals and nonprofit institutions

5、, bear interest and permit drafts from being written against the account to pay third parties. (8) The equity multiplier for a bank measures the amount of _ of the bank and is one part of the evaluation of the banks ROE. (9) _ is the risk that the financial institution may not be able to meet the ne

6、eds of depositors for cash. (10) A traditional measure of earnings efficiency is the _ or total interest income over total earnings assets less total interest expenses over total interest bearing bank liabilities. It measures the effectiveness of a firms intermediation function in the borrowing and

7、lending of money. (11) The_ is the interest rate that equalizes the current market price of a bond with the present value of the future cash flows. (12) _ is the difference between interest-sensitive assets and interest-sensitive liabilities. (13) A(n)_ allows the holder the right to either sell sec

8、urities to another investor (put) or buy securities from another investor (call) for a set price before the expiration date. A(n)_ is a contract where two parties exchange interest payments in order to save money and hedge against interest rate risk. (14) A(n)_ is where there is both a minimum and a

9、 maximum interest rate set on a loan. (15) A(n) _ is a contingent claim of the bank that issues it. The issuing bank, in return for a fee, guarantees the repayment of a loan received by its customer or the fulfillment of a contract made by its customer to a third party. (16) A relatively new type of

10、 credit derivative is a CDO which stands for _. Answer: collateralized debt obligation (17) 24. Lenders can set aside a group of loans on their balance sheet, issue bonds and pledge the loans as collateral against the bonds in _ . These usually stay on the banks balance sheet as liabilities. (18) De

11、bt instruments issued by cities, states and other political entities and which are exempt from federal taxes are collectively known as _ . (19) _ is the risk that the company whose bonds the financial institution owns may retire the entire issue of corporate bonds in advance of their maturity leavin

12、g the bank with the risk of earnings losses resulting from reinvesting the cash at lower interest rates. (20) The _ is the total difference between its sources and uses of funds. (21) The oldest approach to meeting liquidity needs which relies on the sale of liquid assets to meet liquidity demands i

13、s called _. (22) _ are the stable base of deposited funds that are not highly sensitive to movements in market interest rates and tend to remain with a depository institution. (23) When financial institutions tempt customers by paying postage both ways in bank-by-mail services or by offering free gi

14、fts such as teddy bears, they are practicing _. (24) When a customer is charged based on the number and kinds of services used, with the customers that use a number of services being charged less or having some fees waived, this is called _ pricing. (25) _ is the amount in excess of par value paid b

15、y the banks shareholders. (26) Core capital such as common stock, surplus, undivided profits, qualifying noncumulative preferred stock, etc. is referred to as _ capital as defined by the Basel agreement. (27) The largest component of capital among banks is _. 2、 True/False Questions(1 point for each

16、)(1) According to the textbook, banks are those financial institutions that today offer the widest range of financial services of any business firm in the economy. (2) The role performed by banks in the economy in which they transform savings into credit is known as the intermediation role. (3) The

17、aging of the population means less savings in the economy for banks to work with, according to the textbook. (4) Banks which offer virtually all financial services are known as universal banks. (5) In the United States, fixed fees charged for deposit insurance, regardless of how risky a bank is, led

18、 to a problem known as moral hazard. (6) When the Federal Reserve buys T-bills through its open market operations, it causes the growth of bank deposits and loans to decrease. (7) Loans and leases are financial outputs on a financial institutions balance sheet or Report of Condition. (8) Off balance

19、 sheet items for a bank are fee generating transactions which are not recorded on their balance sheet. (9) A banks ROA equals its ROE times the ratio of total assets divided by total equity capital. (10) In the textbook the ratio of pre tax net operating income to total operating revenues is describ

20、ed as a measure of the effectiveness of a financial insitutions expense-control efficiency. (11) Charge-offs represent securities a bank decides to sell because they have declined in value. (12) Usually the principal goal of asset-liability management is to maximize or at least stabilize a banks mar

21、gin or spread. Answer: True (13) A liability-sensitive bank will experience an increase in its net interest margin if interest rates rise. (14) A futures hedge against interest-rate changes generally requires a bank to take an opposite position in the futures market from its current position in the

22、cash market. (15) The long hedge in financial futures contracts is most likely to be used in situations where a bank would suffer losses due to rising interest rates. (16) The buyer of a loan participation must watch both the borrower and the seller bank closely. (17) In a CMO, the different tiers (

23、or tranches) of security purchasers face the same prepayment risk. (18) Most loans that banks sell off their balance sheets carry interest rates that usually are connected to long-term interest rates (such as the 30-year Treasury bond rate). (19) Prepayment risk on securitized assets generally incre

24、ases when interest rates rise. (20) When a bank irrevocably guarantees a commercial paper issue, the banks credit rating substitutes for the borrowers credit rating. (21) Borrowed liquidity (liability) management is less risky for a financial institution than is asset conversion. (22) Most liquidity

25、 problems in banking arise from inside a bank, not from its customers. (23) Deposits owned by commercial banks and held with other banks are called correspondent deposits. (24) The number one factor households consider in selecting a bank to hold their checking account is, according to recent studie

26、s cited in this chapter, low fees and low minimum balance. (25) When a bank temporarily offers higher than average interest rates or lower than average customer fees in order to attract new business they are practicing conditional pricing. (26) One fundamental purpose for regulating capital is to li

27、mit losses to the federal government arising from deposit insurance claims. (27) Under the international capital (Basel) agreement Tier 2 capital must be raised to a minimum of 4 percent of risk-weighted assets. (28) Recent research suggests that interest-rate contracts display considerably less ris

28、k exposure than do foreign-currency contracts. 3、 Multiple Choice Questions(1 point for each)(1) Drew Davis goes to his local bank to get help developing a financial plan and making investment decisions. Which of the more recent services banks offer is Drew taking advantage of ?A) Getting a consumer

29、 loanB) Getting financial adviceC) Managing cashD) Getting venture capital servicesE) Buying a retirement planAnswer: (2) Jonathan Robbins has a bank account in a bank that does not have a physical branch. Jonathan does all of his banking business over the internet. What type of bank does Jonathan h

30、ave his account at?A) Virtual BankB) Mortgage BankC) Community BankD) Affiliated BankE) None of the aboveAnswer: (3) Banks are regulated for which of the reasons listed below? A) Banks are leading repositories of the publics savings. B) Banks have the power to create money. C) Banks provide businesses and individuals with loans that support consumption and investment spending. D) Banks assist governments in conducting economic policy, collecting taxes and dispensing government payments. E) All of the above. Answer: (4) The equival