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61.54 percent°°Wholesale CDs obtained from an investment house rather than directlyfrom a customer are referred to as brokered deposits.True°°Investment securities plus ____________________ is equal to a bank's earning assets.net loans and leases
°°°°A(n) __________________ is a contra asset account.allowance for loan and lease losses°°The bank's ROA is115/9150 = 1.26%°°The bank's profit margin is115/(450 + 95 + 78) = 18.46%°°Purchased funds include all but which one of the following?Demand deposits°°The AU ratio measures the bank's ability to __________ and the PM ratio measures the bank's ability to __________________.generate income from assets; control expenses°°If the average net interest margin for this type of bank is 4.65 percent, then, ceteris paribus, this particular bank is performing poorer than average because this bank has a NIM of 4.08 percent.NIM = (450 + 95 - 246)/(1925 + 5400) = 4.08%°
Fin 432 Exam 203/22/2018°U.S. depository institutions may be subject to as many as ______________ separate regulators.
four°°The FDIC may require an undercapitalized bank toI. provide the FDIC with a capital restoration plan.II. cease acquiring brokered deposits.III. obtain FDIC approval for all acquisitions.IV. suspend dividends and management fees.V. suspend payments on subordinated debt.I, II, III, and IV only°°The Financial Services Modernization Act allowed bank holding companies to open insurance underwriting affiliates and allowed insurance companies to open banks.True°°The difference between the private costs of regulations and the privatebenefits for the producers of financial services is called the net regulatory burden.True°°Areas of commercial bank regulation designed to encourage banks to lend to socially important sectors such as housing and farming are termed ______________________ regulations.credit allocation°°The Financial Services Modernization Act first allowed Section 20 affiliates.False°°To be well-capitalized, a bank must have a leverage ratio of at least ____________ percent, Tier I capital to risk-adjusted asset ratio of at least ____________ percent, and a total risk-based capital ratio of at least ___________ percent. 5; 6; 10°
°There were a greater number of bank failures from 1980 to 1990 inclusive than from 1934 to 1979.True°°The _______________________ introduced the prompt corrective action policy that requires federal intervention when a bank's capital falls below certain minimums.Federal Deposit Insurance Corporation Improvement Act°°The FDIC is required to collect additional insurance premiums from insured institutions if the BIF reserves fall below ________________ of insured deposits.1.15 percent°°A bank that has an equity to asset ratio equal to 12 percent can normally lend no more than _________________ of its assets to any one borrower.1.20 percent°°The quantity of notes and coin in the economy is called inside money but the bulk of the money supply is outside money.