51. A bank’s equity multiplier measures the bank’s:a.financial leverage.b.operating leverage.c.credit leverage.d.interest rate exposure.e.duration gap.52. Return on assets can be calculated as:53. What is the return on equity for a bank that has an equity multiplier of 14, an interest expense ratio of 4%, and a return on assets of .9%?
54. What is the equity multiplier for a bank where equity is equal to 8% of total assets?55. Net income is calculated as:a.total revenue – total operating expenses.b.total revenue – total operating expenses – taxes.c.asset utilization – expense ratio.d.asset utilization – expense ratio – tax ratio.e.interest expense ratio – non-interest expense ratio – provision for loan loss ratio.56. The expense ratio is calculated as:57. Interest expense varies between banks because of:
Use the following information for questions 58-62.Cash and Due from Banks50$ Investments300$ Federal Funds10$ Loans350$ Premises90$ Average Total Assets800$ Demand Deposits100$ Time Deposits300$ Federal Funds300$ Equity100$ Average Total Liabilities & Equity800$ Interest Income100$ Interest Expense75$ Non-Interest Income5$ Non-Interest Expense25$ Net Income5$ Balance SheetIncome Statement1st State BankAssetsLiabilities & Equity58. What is 1stState’s return on equity?59. The goal of a bank manager should be:a.to maximize earnings.b.to minimize taxes.c.to minimize risk.d.to maximize shareholder wealth.e.to maximize net interest income.
60. A savings and loan that sold off their junk bond holdings and issued consumer auto loans with the proceed would most likely be:
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- Spring '16