Exam 8: An Introduction to Financial Intermediaries and Risk

__________ is the risk that the interest rate will unexpectedly change so that the costs of the liabilities of an FI exceed the earnings on its assets.

The capital base is the value of a bank's

An FI can reduce liquidity risk by which of the following?

_________________________ best describes a situation where a potential borrower knows more about the risks and returns of an investment project than a bank loan officer.

The risk associated with unavailable funds when there is a need to make a payment is which of the following?

The largest liability of credit unions is

The single largest group of contractual FIs in terms of total assets is

Which of the following is or has been directly regulated in the financial system?

When the borrower has an incentive to use the proceeds of a loan for a more risky venture after the loan is funded, lenders are faced with a/an

Which of the following do not serve as an asset(s) for depository institutions?

The risk associated with declining spreads between assets and liabilities is which of the following?

Which deposit is highly liquid but cannot be withdrawn by writing a check?

__________ are highly liquid deposits that can usually be withdrawn on demand but not by writing a check.

The Gramm-Leach-Bliley Act (GLBA)

Which of the following intermediaries uses its funds primarily to acquire mortgage loans?

Which of the following intermediaries is likely to hold the largest percentage of assets in mortgages?

The risk associated with changes in the dollar value of foreign financial assets is which of the following?

The largest asset of credit unions is

________________________ best describes a situation where a borrower takes out a loan and, unbeknownst to the lender, uses the proceeds for a much more risky venture.

Financial claims against financial intermediaries include