Chapter 10Funding the BankMultiple Choice 1.Liability management decisions determines all of the following except: a.interest expense on borrowed funds.b.check handling costs.c.personnel costs.d.fee income.e.loan rates.Answer: e 2.___________ includes transaction accounts, MMDAs, savings accounts and small time deposits. 3.___________ includes federal funds purchased, repurchase agreements and Federal Home Loan Bank borrowings. 4.___________ includes common stock, preferred stock and retained earnings.
5.Core deposits are affected by all of the following except: a.location.b.availability.c.volatile liabilities.d.service charges.e.Core deposits are affected by all of the above.Answer: c 6.Which of the following would notbe considered "hot money"? 7.All of the following are considered transaction accounts except: 8.Noninterest-checking accounts are called: 9.Which of the following is true regarding money market deposit accounts (MMDAs)? a.A maximum of three checks per month may be written on a MMDA account. b.The average check size on an MMDA account is smaller than the average demand deposit check size.c.MMDAs are formally transaction accounts.d.Required reserves on MMDAs are higher than on demand deposit accounts.e. Rates paid on MMDAs are generally higher than rates on money market mutual funds. Answer: a
10. Small time deposits are characterized by all of the following except:
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