129.A bank’s core deposits are: a.vault cash.b.stable deposits that are not typically withdrawn over short periods of time.c.the bank’s deposits at the Federal Reserve.d.the most interest rate sensitive liabilities of a bank.e.deposits held in foreign offices.Answer: b130.Core deposits consist of all of the following except: f.demand deposits.g.NOW accounts.h.jumbo certificates of deposit.i.savings accounts.j.money market demand accounts.Answer: c131.Which of the following is notconsidered a volatile liability?
132.Which of the following would be the leastsensitive to changes in interest rates? 133.The “provision for loan and lease losses”:f.are the realized losses from the previous accounting period.g.represents management’s estimate of potential lost revenue from bad loans.h.determined by the Federal Reserve for all banks. i.does not affect net income.j.is another name for a bank’s “burden.”Answer: b 134.A bank’s “burden” is defined as: 135.Everything else the same, a bank’s “burden” would most likely increase given: a.a decrease in overhead expenses.b.an increase in interest rates.c.a decrease in interest rates.d.an increase in executive salaries.e.an increase in service charges collected by the bank.Answer: d136.Interest income includes: a. and b. only
137.A bank currently owns a municipal bond paying a tax-exempt rate of 5%. If the banks marginal tax rate is 35%, what is the taxable equivalent yield? 138.A bank currently owns a municipal bond paying a tax-exempt rate of 6.5%. If the banks marginal tax rate is 40%, what is the taxable equivalent yield?
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