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17.Which of the following is nottrue regarding common stock? a.Common stock has no maturity. b.New issues of common stock may dilute existing shareholder equity. c.Common stock is a permanent source of funds. d.Dividends paid are not tax-deductible. e.Dividends are considered a fixed charge that must be paid. 18.For a bank with deficient capital ratios, which of the following actions could be taken to increase the capital ratios, holding everything else the same? 19.Which of the following is nota historical problem with deposit insurance?
20.The Basel Committee defines operational risk as the risk of loss resulting from: True/False 21.Decreasing capital increases risk by decreasing financial leverage. 22.In general, smaller banks have higher capital ratios than larger banks. 23.Regulatory capital ratios focus on the book value of equity. 24.Under the current risk-based capital requirements, banks must hold capital against standby letters of credit they have issued as guarantees. 25.A bank that holds only U.S. Treasury securities is notrequired to hold any capital since all the assets are risk-less. 26.What constitutes Tier 2 capital varies substantially between countries. 27.Smaller banks rely more heavily on internally generated capital than larger banks.