1、(a) adverse selection problem.(b) lemon problem.(c) adverse credit risk problem.(d) moral hazard problem. D4. Banks attempts to solve adverse selection and moral hazard problems help explain loan management principles such as(a) screening and monitoring of loan applicants.(b) collateral and compensa
2、ting balances.(c) credit rationing.(d) all of the above.(e) only (a) and (b) of the above.5. In one sense, _ appears surprising since it means that the bank is not _ its portfolio of loans and thus is exposing itself to more risk.(a) specialization in lending; diversifying(b) specialization in lendi
3、ng; rationing(c) credit rationing;(d) screening;6. From the standpoint of _, specialization in lending is surprising but makes perfect sense when one considers the _ problem.(a) moral hazard; diversification(b) diversification; moral hazard(c) adverse selection;(d) diversification; adverse selection
4、7. Provisions in loan contracts that proscribe borrowers from engaging in specified risky activities are called(a) proscription bonds.(b) collateral clauses.(c) restrictive covenants.(d) liens. C8. Banks attempt to screen good from bad credit risks to reduce the incidence of loan defaults. To do thi
5、s, banks(a) specialize in lending to certain industries or regions.(b) write restrictive covenants into loan contracts.(c) expend resources to acquire accurate credit histories of their potential loan customers.(d) do all of the above.9. A banks commitment (for a specified future period of time) to
6、provide a firm with loans up to a given amount at an interest rate that is tied to a market interest rate is called(a) credit rationing.(b) a line of credit.(c) continuous dealings.(d) none of the above.10. Lines of credit and long-term relationships between banks and their customers(a) reduce the c
7、osts of information collection.(b) make it easier for banks to screen good from bad risks.(c) enable banks to deal with moral hazard contingencies that are neither anticipated nor specified in restrictive covenants.(e) do only (a) and (b) of the above.11. Compensating balances(a) are a particular fo
8、rm of collateral commonly required on commercial loans.(b) are a required minimum amount of funds that a borrower (i.e., a firm receiving a loan) must keep in a checking account at the bank.(c) allow banks to monitor firms check payment practices which can yield information about their borrowers fin
9、ancial conditions.12. A bank that wants to monitor the check payment practices of its commercial borrowers, so that moral hazard can be prevented, will require borrowers to(a) place a bank officer on their board of directors.(b) place a corporate officer on the banks board of directors.(c) keep comp
10、ensating balances in a checking account at the bank.13. Of the following methods that banks might use to reduce moral hazard problems, the one not legally permitted in the United States is the requirement that(a) firms keep compensating balances at the banks from which they obtain their loans.(b) fi
11、rms place on their board of directors an officer from the bank.(c) loan contracts include restrictive covenants.(d) individuals provide detailed credit histories to bank loan officers.14. When a lender refuses to make a loan, although borrowers are willing to pay the stated interest rate or even a h
12、igher rate, it is said to engage in(a) constrained lending.(b) strategic refusal.(d) collusive behavior.15. When a lender refuses to make a loan, even though borrowers are willing to pay the stated interest rate or even a higher rate, it is said to engage in(a) specialized lending.(c) diversified le
13、nding.(d) coercive behavior.(e) none of the above. E16. Credit rationing occurs when a bank(a) refuses to make a loan of any amount to a borrower, even when she is willing to pay a higher interest rate.(b) restricts the amount of a loan to less than the borrower would like.(c) does either (a) or (b)
14、 of the above.(d) does neither (a) nor (b) of the above.17. Because larger loans create greater incentives for borrowers to engage in undesirable activities that make it less likely they will repay the loans, banks(a) ration credit, granting borrowers smaller loans than they have requested.(b) ratio
15、n credit, charging higher interest rates to borrowers who want large loans than to those who want small loans.(c) ration credit, charging higher fees as a percentage of the loan to borrowers who want large loans than to those who want small loans.(d) do none of the above.18. When banks offer borrowe
16、rs smaller loans than they have requested, banks are said to(a) shave credit.(b) discount the loan.(c) raze credit.(d) ration credit.19. Which of the following are not rate-sensitive assets?(a) Securities with a maturity of less than one year.(b) Variable-rate mortgages.(c) Fixed-rate mortgages.(d)
17、All of the above are rate-sensitive assets.(e) None of the above is a rate-sensitive asset.20. Liabilities that are partially, but not fully, rate-sensitive include(a) checkable deposits.(b) federal funds.(c) non-negotiable CDs.(d) fixed-rate mortgages.(e) money market deposit accounts.21. If a bank
18、 has more rate-sensitive liabilities than rate-sensitive assets, then a(n) _ in interest rates will _ bank profits.(a) increase; increase(b) increase; reduce(c) decline;(d) decline; not affect22. If a bank has more rate-sensitive assets than rate-sensitive liabilities, then a(n) _ in interest rates
19、will _ bank profits.23. If a bank has _ rate-sensitive assets than rate-sensitive liabilities, then a(n) _ in interest rates will increase bank profits.(a) more; decline(b) more;(c) less;(d) both (a) and (c)24. The difference between rate-sensitive liabilities and rate-sensitive assets is known as t
20、he(a) duration.(b) interest-sensitivity index.(c) interest-rate risk index.(d) gap.Table 24.1First National BankAssetsLiabilitiesRate-sensitive$20 million$50 millionFixed-rate$80 million$40 million25. Referring to Table 24.1, First National Bank has a gap of _.(a) 30(b) +30(c) 60(d) 026. Referring t
21、o Table 24.1, if interest rates rise by 5 percentage points, then bank profits (measured using gap analysis) will(a) decline by $0.5 million.(b) decline by $1.5 million.(c) decline by $2.5 million.(d) increase by $1.5 million.27. Refer to Table 24.1. Assuming that the average duration of its assets
22、is five years, while the average duration of its liabilities is three years, a rise in interest rates from 5 percent to 10 percent will cause the net worth of First National to _ by _ of the total original asset value. 11 percent(b) decline;(c) increase; 10 percent 5 percentTable 24.2$60 million28.
23、Referring to Table 24.2, First National Bank has a gap of _.(a) 10(b) 10(c) 2029. Referring to Table 24.2, if interest rates rise by 5 percentage points, then bank profits (measured using gap analysis) will(d) increase by $2.0 million.30. Refer to Table 24.2. Assuming that the average duration of th
24、e banks assets is four years, while the average duration of its liabilities is three years, a rise in interest rates from 5 percent to 10 percent will cause the net worth of First National to _ by _ of the total original asset value.(a) decline; 1.3 percent 6.2 percent(d) increase;31. If First State
25、 Bank has a gap equal to a positive $20 million, then a 5 percentage point drop in interest rates will cause profits to(a) increase by $10 million.(b) increase by $1.0 million.(c) decline by $10 million.(d) decline by $1.0 million.32. If First National Bank has a gap equal to a negative $30 million,
26、 then a 5 percentage point increase in interest rates will cause profits to(a) increase by $15 million.(b) increase by $1.5 million.(c) decline by $15 million.(d) decline by $1.5 million.33. Measuring the sensitivity of bank profits to changes in interest rates by multiplying the gap times the change in the interest rate is called(a) basic duration analysis.(b) basic gap analysis.
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