6154 percent Wholesale CDs obtained from an investment house rather than

6154 percent wholesale cds obtained from an

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61.54 percent ° ° Wholesale CDs obtained from an investment house rather than directly from a customer are referred to as brokered deposits. True ° ° Investment securities plus ____________________ is equal to a bank's earning assets. net loans and leases
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° ° ° ° A(n) __________________ is a contra asset account. allowance for loan and lease losses ° ° The bank's ROA is 115/9150 = 1.26% ° ° The bank's profit margin is 115/(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% °
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Fin 432 Exam 2 03/22/2018 ° U.S. depository institutions may be subject to as many as ______________ separate regulators.
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four ° ° The FDIC may require an undercapitalized bank to I. 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 private benefits 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 °
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° 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.
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