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

1、商业银行管理彼得S罗斯英文原书第8版英语试题库Chap011Chapter 11Liquidity and Reserves Management: Strategies and PoliciesFill in the Blank Questions 1. A(n) _ is an asset which can be converted into cash easily, which has a relatively stable price and is reversible so that the seller can recover their original investment

2、with little risk of loss. Answer: liquid asset 2. When a financial institution sells assets to manage liquidity it faces _. They lose the future earnings on those assets, they face transaction costs on those sales and the assets most easily sold often have the lowest return. Answer: opportunity cost

3、s 3. _ is when the financial institution borrows money in the money market to meet their liquidity needs. Answer: Purchased (borrowed) liquidity 4. The _ is the total difference between its sources and uses of funds. Answer: liquidity gap 5. _ are the deposits and other borrowings of the bank which

4、are very interest sensitive or where the bank is sure they will be withdrawn during the current period. Answer: Hot money liabilities 6. The _ is the idea that management should make all good loans and count on its ability to borrow funds if it does not have the liquidity to meet its cash needs. Ans

5、wer: customer relationship doctrine 7. _ are the assets the bank must by law hold behind its deposits. In the U.S. only vault cash and deposits held with the Federal Reserves can be used to meet these requirements. Answer: Legal reserves 8. A(n) _ is the account the bank must have at the Federal Res

6、erve to cover any checks drawn against the bank. Answer: clearing balance 9. A(n) _ is a service developed by banks where the bank shifts money out of accounts with reserve requirements and into savings accounts overnight. Answer: sweeps account 10. The _ is a 14 day period stretching from a Thursda

7、y to a Wednesday. This is the period in which the bank has to keep their average daily level of required reserves for a particular computation period. Answer: reserve maintenance period 11. _ is the availability of cash in the amount needed at a reasonable cost. Answer: Liquidity 12. The oldest appr

8、oach to meeting liquidity needs which relies on the sale of liquid assets to meet liquidity demands is called _. Answer: asset liquidity management 13. Under a _ strategy some of the expected demands for liquidity are stored in assets, while others are backstopped by arrangements for lines of credit

9、 from banks or other suppliers of funds. Answer: balanced liquidity management 14. A(n) _ is the person in the bank responsible for the banks cash position and meeting legal reserve requirements. Answer: money position manager 15. The method used in the U.S. to determine a banks legal reserve requir

10、ement in which the period for holding legal reserves follows the period used to calculate the required amount of legal reserves is called _. Answer: lagged reserve accounting 16. The fed funds rate is generally most volatile on bank _ day. Answer: settlement 17. Many depository institutions hold _ b

11、alances (extra reserves) to help prevent overdraft penalties. Answer: precautionary 18. Not all _ banks around the world have reserve requirements. Answer: central 19.For several decades, the largest banks around the world have chosen which calls for borrowing immediately spendable funds to cover al

12、l anticipated demands for liquidity.Answer: liability management20.The approach to managing liquidity starts with two simple facts, liquidity rises as deposits increase and loans decrease and liquidity falls when deposits fall and loans increase.Answer: sources and uses of funds21.In the approach to

13、 managing liquidity deposits and other sources of funds are divided into categories and then liquidity managers must set aside liquid funds according to some desired operating rule.Answer: structure of funds22.Many financial service institutions estimate their liquidity needs based upon experience a

14、nd industry averages. This approach to managing liquidity is called the approach.Answer: liquidity indicator23.Many analysts believe there is only one sound method for assessing a financial institutions liquidity needs. This method centers on .Answer: discipline of the financial marketplace (signals

15、 from the marketplace)24.The for deposits and other reservable liabilities and for vault cash holdings is a two week period extending from Tuesday to a Monday two weeks later.Answer: reserve computation period25.If total legal reserves held are greater than required reserves the bank has .Answer: ex

16、cess reserves26.If total legal reserves held are less than required reserves the bank has .Answer: a reserve deficit27.The is where a money position manager can cover a large reserve deficit quickly. It is usually one of the cheapest places to borrow but is also frequently volatile.Answer: federal f

17、unds market28.One of the ratios used in the liquidity indicator approach to managing a financial institutions liquidity needs is . This ratio is cash and due from depository institutions divided by total assets where a greater ratio indicates a stronger liquidity position.Answer: cash position indic

18、atorTrue/False Questions T F 29. Liquid assets must have a reasonably stable price so that the market is deep enough to absorb the sale without a significant loss of value. Answer: True T F 30. Asset liquidity management (or asset conversion) involves storing liquidity in assets, such as deposits an

19、d jumbo CDs.Answer: False T F 31. Asset liquidity management (or asset conversion) involves storing liquidity in assets, such as cash and marketable securities.Answer: True T F 32. Liquid assets generally have a stable price but are not necessarily reversible. Answer: False T F 33. Asset conversion

20、is considered to be a costless approach to liquidity management. Answer: False T F 34. One principle of sound bank liquidity management is to be sure to sell first those assets with the least profit potential. Answer: True T F 35. Borrowed liquidity (liability) management is less risky for a financi

21、al institution than is asset conversion. Answer: False T F 36. A financial institutions liquidity gap represents the difference between its sources and uses of liquid funds. Answer: True T F 37. A bank expects to lose its hot money liabilities, according to the textbook. Answer: True T F 38. Accordi

22、ng to the customer relationship doctrine a bank should turn down any loan requests for which it does not have enough deposits on hand but should help its borrowing customer obtain funds from some other source (such as by issuing a letter of credit to backstop the customers loan from another lender).

23、 Answer: False T F 39. A U.S. bank can run up to a 5-percent deficit in its legal reserve requirement without incurring an interest penalty from the Federal Reserve System. Answer: False T F 40. Most liquidity problems in banking arise from inside a bank, not from its customers. Answer: False T F 41

24、. Holdings of liquid assets at U.S. banks have experienced a gradual decline in recent years. Answer: True T F 42. The Federal Reserve has been lowering deposit reserve requirements in recent years. Answer: True T F 43. The liquidity indicator, core deposits divided by total assets, is a measure of

25、stored liquidity.Answer: False T F 44. A banks money position manager is responsible for insuring that the bank maintains an adequate level of legal reserves. Answer: True T F 45. If a bank in the United States runs a legal reserve deficit of more than 2 percent of its required daily average legal r

26、eserve position it will be assessed an interest penalty equal to the Federal Reserves discount rate plus 5 percent. Answer: False T F 46. If a bank receives more checks deposited to the accounts it holds than checks drawn against its deposit accounts, the banks legal reserves will tend to increase.

27、Answer: True T F 47. According to the textbook if a banks liquidity deficit is expected to last for only a few hours, the federal funds market or the central banks discount window is normally the preferred source of funds. Answer: True T F 48. Banks making heavy use of borrowed sources of liquidity

28、must wrestle with the problem of interest cost uncertainty, according to the textbook. Answer: True T F 49. All central banks impose reserve requirements on the banks they regulate. Answer: False T F 50. The sources and uses of funds method of estimating a banks liquidity requirements divides the ba

29、nks liabilities into three types (hot money, vulnerable funds and stable funds) and estimates the probability of each being withdrawn from the bank. Answer: False T F 51. One of the problems with liquidity management for a bank is that rarely does the demand for funds equal the supply of funds at a

30、given time. Answer: True T F 52. One of the problems with liquidity management for a bank is that there is a trade-off between bank liquidity and profitability. Answer: True T F 53. The liquidity problem for banks is made easier because most of their liabilities are not subject to immediate repayment. Answer: False T F 54. The liquidity problem for banks is made easier because depositors and borrowers are not sensitive to changing interest rates. Answer