Unformatted text preview: $20 million worth of shares of new stock 7. Assume a bank earns a rate of return of 1.0 percent on its total assets. If the bank’s capital ratio (capital/total assets) is 8 percent, the bank’s rate of return on capital or equity is: 12.5 percent 8. The net interest margin for banks is defined as the amount by which rates earned on bank earning assets exceeds rates paid on bank liabilities 9. The banking legislation that phased out the interest rate ceilings payable on bank deposits was the Depository Institutions Deregulation and Monetary Control Act of 1980 10. Drawbacks of the government “safety net” for financial institutions include: All of the above 11. The Money Market Mutual Fund Panic of 2008 was triggered by: the bankruptcy of Lehman Brothers investment bank...
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- Spring '08
- Sociology, Fractional-reserve banking, Commerce Bank, Commerce Bank balance