Question 1 � Banks G and H are the same size and have similar operations. Bank G holds the minimum level of capital and Bank H holds a higher level of capital. Bank G’s return on equity is probably ____ volatile than that of Bank H. Bank G’s beta is probably ____ than that of Bank H. Question 2 � Banks A and B have the same net income. Bank A has a higher capital ratio and more assets than B. Bank A’s return on assets is ____ than Bank B’s. Bank A’s return on equity is ____ than Bank B’s. Question 3 � The risk premium on a commercial bank is ____ related to economic growth and ____ related to management skills. Question 4 � Net income measured as a percentage of assets is Question 5 � Interest paid on deposits and borrowed funds is called Question 6 � ____ results from a bank’s sale of securities. Question 7 � If a bank has short-term deposits and provides long-term fixed rate loans, and interest rates decline over time, its net interest margin should be: Question 8 � Interest income generated from all assets is called Question 9 � Changes in ____ are a factor affecting the value of a commercial bank over which the bank has some control. Question 10 � During the credit crisis, the level of ____ was much higher than in other periods. Question 11 � If a bank is too ____ in attempting to avoid loan losses, its net interest margin will be ____. Question 12 � When only equity counts as capital, the leverage measure is Question 13 � The sum of net interest income, non-interest income, and securities gains, minus provision for loan losses and non-interest expenses equals Question 14 � If a bank increases its provisions for loan losses, its interest income is ____, and its noninterest income is ____. Question 15 � Which of the following banks would likely have the highest return on equity? Question 16 � Federal credit unions are regulated and supervised by the Question 17 � Savings institutions obtain most of their funds from Question 18 � ____ are the primary asset of savings institutions. Question 19 � To obtain short-term funds, savings institutions commonly borrow funds in the ____ market. Question 20 � Savings institutions can obtain capital by: Question 21 � The primary use of credit union funds is Question 22 � The ____ savings institutions hold the most assets in aggregate. Question 23 � The risk that a credit union will experience an unanticipated wave of withdrawals without an offsetting amount of new deposits is ____ risk. Question 24 � Credit unions obtain most of their funds from Question 25 � Which of the following is not an asset of savings institutions? Question 26 � Today, credit unions are regulated as to the Question 27 � ____ are non-profit organizations composed of members with a common bond. Question 28 � ____ do not represent an asset of credit unions. Question 29 � Savings institutions that reduce their amount of ____ will best reduce their exposure to interest rate risk. Question 30 � ____ risk is probably the least concern for savings institutions.
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