CHAP012 - Chapter 12 Depository Institutions: Banks and...

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Chapter 12 Depository Institutions: Banks and Bank Management Multiple Choice Questions 1. Which of the following correctly states the relationship regarding banks' balance sheets? A) Total Bank Liabilities = Total Bank capital + Total Bank Assets B) Total Bank Assets = Total Bank Capital – Total Bank Liabilities C) Total Bank Assets = Total Bank Liabilities – Total Bank Capital D) Total Bank Assets = Total Bank Liabilities + Total Bank Capital. Answer: D LOD: 1 Page: 287 A-Head: The Balance Sheet of Commercial Banks. 2. Considering the balance sheet of banks, which of the following statements is true? A) Total Bank Assets = Total Bank Capital – Total Bank Liabilities. B) Total Bank Assets = Total Bank Liabilities + Total Bank Capital. C) Total Bank Assets +Total Bank Capital = Total Bank Liabilities. D) Total Bank Assets + Total Bank Liabilities =Total Bank Capital E) a and d Answer: B LOD: 1 Page: 287 A-Head: The Balance Sheet of Commercial Banks. 3. Considering the balance sheet of banks, which of the following statements is FALSE ? A) Total Bank Assets + Total Bank Liabilities = Total Bank Capital. B) Total Bank Assets = Total Bank Liabilities + Total Bank Capital. C) Total Bank Liabilities = Total Bank Assets – Total Bank Capital. D) Total Bank Capital = Total Bank Assets – Total Bank Liabilities. Answer: A LOD: 1 Page: 287 A-Head: The Balance Sheet of Commercial Banks. 4. A bank's net worth is synonymous to: A) A bank's assets. B) A bank's assets + a bank's liabilities. C) A bank's capital. D) A bank's required reserves. Answer: C LOD: 1 Page: 287 A-Head: The Balance Sheet of Commercial Banks. 334 Cecchetti: Money, Banking, and Financial Markets
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Chapter 12 Depository Institutions: Banks and Bank Management 5. Considering the balance sheet for all commercial banks in the U.S., the largest category of assets is: A) Cash items. B) U.S. Government Securities. C) Required reserves. D) Loans. Answer: D LOD: 1 Page: 288 A-Head: The Balance Sheet of Commercial Banks. 6. Considering the balance sheet for all commercial banks in the U.S., the largest category of liabilities is: A) Borrowing from other banks in the U.S. B) Savings Deposits and Time deposits. C) Checkable Deposits. D) Borrowings from Non-banks in the U.S. Answer: B LOD: 1 Page: 288 A-Head: The Balance Sheet of Commercial Banks. 7. Considering the balance sheet for all commercial banks in the U.S., the net worth of banks is: A) About 5 times the total assets. B) About 1/11 of total assets C) Just about the same as total assets. D) About the same as total liabilities. Answer: B LOD: 1 Page: 288 A-Head: The Balance Sheet of Commercial Banks. 8. Considering the balance sheet for all commercial banks in the U.S., the net worth of banks is: A) About 1/10 of total liabilities. B) About 5 times total assets.
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This note was uploaded on 02/12/2012 for the course ECON 101 taught by Professor Abrams during the Spring '11 term at Adams State University.

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CHAP012 - Chapter 12 Depository Institutions: Banks and...

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