HW_10_Questions_Chapter_18_20[1]

HW_10_Questions_Chapter_18_20[1] - dealing with a failed...

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HW 10 Chapter 18, 20 Chapter 20 End-of-Chapter Questions 10-15 Chapter 20 Quantitative Problems 1, 2 Multiple Choice 1. Because of financial innovation, banks have suffered a simultaneous decline of cost and income advantages. suffered a decline in their cost advantages in acquiring funds but have not experienced a decline in their income advantages. achieved competitive advantages in both acquiring and using funds. suffered a decline in their income advantages in using funds but have not experienced a decline in their cost advantages. 2. The practice of creating marketable debt instruments that are backed by otherwise illiquid assets is known as homogenization. liquidization. securitization. standardization.
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3. Which of the following have stimulated innovation in banking? Increases in the volatility of interest rates. Developments in information and communications technology. Both of the above. 4. What was the FDIC's most common procedure for
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Unformatted text preview: dealing with a failed bank before 1991? the sequential service method the purchase and liquidate method the payoff method the purchase and assumption method 5. Determine whether the below statements are true or false. I. Banks with more capital have greater incentive to take risks. II. Restrictions on bank asset holdings are designed to reduce bank risk taking. I is false; II is true. I is true; II false I and II are both true. I and II are both false. 6. When the FDIC uses the payoff method to handle a failed bank, no depositors are paid in full. all depositors are paid in full. owners of deposits that exceed the insurance limit are not paid in full. none of the above. 7. Banking crises in Norway, Finland, and Sweden were caused by a collapse in real estate prices. a sharp increase in interest rates. a drastic devaluation of currency values. the downfall of the Soviet economy....
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This note was uploaded on 09/07/2011 for the course FIN 353 taught by Professor Cobus during the Spring '08 term at S.F. State.

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HW_10_Questions_Chapter_18_20[1] - dealing with a failed...

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