Larger cash balances reduce the need to borrow at the discount window. Larger cash balances reduce the risk of bank runs. Larger cash balances reduce the risk of paying penalties to the Federal Reserve. Larger cash balances increase reserve balances. Larger cash balances reduce a bank's interest expense. Question 11 0 / 1 point Which of the following indicates the potential for deposits leaving a bank?
High business activity and growth Deposits that are inelastic to changes in interest rates An aggressive bank loan officer Large deposits held by a single customer Small unused commercial credit lines outstanding Question 12 1 / 1 point Which of the following is not a reason that banks hold cash assets? To meet customer's needs for currency. To meet capital requirements. To meet required reserves. To compensate for correspondent bank services. To assist in the check clearing process. Question 13 0 / 1 point There is a short-run trade-off between a bank’s liquidity and _______. asset quality profitability discount window borrowing all of the above a. & b. only Question 14 0 / 1 point Which of the following does not directly influence the amount of required reserves a bank must hold? The required reserve ratio. The dollar amount of cash items in process of collection. The dollar amount of demand deposits outstanding. The dollar amount of money market deposit accounts outstanding. The dollar amount of NOW accounts outstanding. Question 15 0 / 1 point Correspondent banking services would include which of the following? Check collection Data processing services Federal funds trading
all of the above a. & c. only Question 1 0 / 1 point Which of the following could be used to identify a potential increase in borrowing by customers that might deplete a bank’s cash reserves? The amount of insured versus uninsured deposits Large deposits held by a single entity Volume of Fed Funds sold The sensitivity of deposits to changes in the level of interest rates Unused commercial credit lines outstanding Question 2 1 / 1 point Which of the following is not a measure of liability liquidity? Total loans to total assets Total deposits to total assets Total equity to total assets Loan losses to net loans Core deposits to total assets Question 3 0 / 1 point Which of the following is not considered a viable long-term source of bank liquidity? Federal funds sold Short-term Treasury securities Cash High quality short-term municipal securities Reverse repurchase agreements Question 4 0 / 1 point In determining reserves, the banks and the Federal Reserve currently use: a leading reserve accounting system. a contemporaneous reserve accounting system. a lagging reserve accounting system. an actual reserve accounting system.
a holding reserve accounting system.
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