sample_exam_final

sample_exam_final - CITY UNIVERSITY OF HONG KONG Course...

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- 1 - CITY UNIVERSITY OF HONG KONG Course code & title : EF4330 Management of Financial Institutions Session : Semester A Time allowed : Three hours This paper has 7 pages (including this cover page). 1. This paper consists of 35 questions in 3 sections. 2. Answer ALL questions in Section A, B, and C. 3. Use the multiple choice answer sheet for questions from Section A and the answer book for questions from Section B and C.
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- 2 - Section A (1.5% * 30 = 45%) Attempt ALL questions from this Section. There is only ONE right answer for each question. 1. What distinguishes financial intermediaries from industrial firms? A) FI balance sheets are almost totally comprised of financial securities whereas commercial firms hold substantial amounts of real assets. B) Industrial firms are the customers of FIs. C) FIs deal exclusively in primary securities while Industrial firms specialize in secondary securities. D) Industrial firms produce real goods or services while FIs only manipulate money. E) Industrial firms are unregulated while FIs are heavily regulated. 2. ……. 3. Customer deposits are classified on the FI's balance sheet as A) assets, because the FI uses deposit funds to earn profits. B) liabilities, because the FI uses deposits as a source of funds. C) assets, because customers view deposits as assets. D) liabilities, because the FI must meet reserve requirements on customer deposits. E) liabilities, because FIs are required to serve depositors. 4. ……. . 5. ……. . 6. Which of the following is not an advantage of a finance company over a commercial bank in providing services to small business customers? A) Finance companies are less willing to accept risky customers than are banks. B) They are not subject to regulations that restrict the type of products and services they can offer. C) Finance companies often have substantial industry and product expertise. D) Finance companies generally have lower overhead than do banks. E) Finance companies do not accept deposits and therefore do not need to deal with bank-type regulatory restrictions. 7. What type of risk focuses upon mismatched asset and liability maturities and durations? A) Liquidity risk. B) Interest rate risk. C) Credit risk.
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sample_exam_final - CITY UNIVERSITY OF HONG KONG Course...

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