The following financial information pertains to Harrison Bank. $\begin{array} { c r } \text { Net Profit Margin } & 12.5 \% \\ \text { Net Income } & \$ 1000 \\ \text { Total Assets } & \$ 62,500 \\ \text { Total Equity } & \$ 6250 \end{array}$ -What is the bank's ROA?

A) 1.6% B) 10% C) 12.8% D) 16% E) None of the options is correct A) 1.6% B) 10% C) 12.8% D) 16% E) None of the options is correct

The following financial information pertains to Harrison Bank. $\begin{array} { c r } \text { Net Profit Margin } & 12.5 \% \\ \text { Net Income } & \$ 1000 \\ \text { Total Assets } & \$ 62,500 \\ \text { Total Equity } & \$ 6250 \end{array}$ -What is the bank's ROE?

A) 1.6% B) 10 % C) 12.8% D) 16% E) None of the options is correct A) 1.6% B) 10 % C) 12.8% D) 16% E) None of the options is correct

Following is the information listed below for Carter State Bank.What is the bank's net profit margin? $\begin{array} { l l } \text { Net income } & \$ 55 \text { million } \\ \text { Total operating revenue } & \$ 650 \text { million } \\ \text { Total assets } & \$ 4,055 \text { million } \\ \text { Total equity capital } & \$ 350 \text { million } \end{array}$

A) 8.46 percent B) 16.03 percent C) 15.71 percent D) 1.36 percent E) None of the options is correct A) 8.46 percent B) 16.03 percent C) 15.71 percent D) 1.36 percent E) None of the options is correct

Exam 6: Measuring and Evaluating the Performance of Banks and Their Principal Competitors

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One of the principal components of evaluating ROE is _____________________ ratio,which reflects a bank's portfolio management policies and the mix and yield on its assets.

Free

(Short Answer)

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(31)

Question 1

Correct Answer:

Verified

asset utilization

Which of the following ratios would be a measure of credit risk?

Free

(Multiple Choice)

4.8/5

(34)

Question 2

Correct Answer:

Verified

If the discount factor associated with the value of a bank's stock rises,the bank's stock price should rise,other factors held constant.

Free

(True/False)

4.9/5

(39)

Question 3

Correct Answer:

Verified

False

Following data pertains to Castle State Bank. -What is the bank's ROA?

(Multiple Choice)

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Question 4

The Smith-James Bank has an ROE of 17.5%,an asset utilization ratio of 13%,and a net profit margin of 9%.What is the bank's equity multiplier?

(Multiple Choice)

4.8/5

(26)

Question 5

__________________________ is the risk that shifting interest rates in the market will adversely affect a financial institution's net income or the value of its assets or equity.

(Short Answer)

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(40)

Question 6

The risk of deterioration in the value of a financial firm's assets as a result of fluctuating currency prices is known as:

(Multiple Choice)

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(33)

Question 7

The following financial information pertains to Harrison Bank. Net Profit Margin 12.5\% Net Income \ 1000 Total Assets \ 62,500 Total Equity \ 6250 -What is the bank's ROA?

(Multiple Choice)

4.8/5

(49)

Question 8

The Smith-James Bank has an ROE of 17.5%,an asset utilization ratio of 13%,and a net profit margin of 9%.What is the bank's ROA?

(Multiple Choice)

4.9/5

(27)

Question 9

________________________ is the uncertainty associated with public opinion.Negative publicity (whether true or not)can affect a financial firm's earnings by dissuading customers from using the services of the institution.

(Short Answer)

4.8/5

(30)

Question 10

The main reason behind the failure of Superior Bank of Chicago and eventual FDIC's takeover of this institution in 2001 was attributed to misleading accounting practices of inflating asset values and revenues deflating liabilities and expenses.

(True/False)

4.7/5

(39)

Question 11

What is the equity multiplier for a bank whose equity is equal to 10 percent of total assets?

(Multiple Choice)

4.9/5

(38)

Question 12

The ratio of non-performing assets to total loans and leases is a measure of credit risk in banking industry.

(True/False)

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(39)

Question 13

Amy Farmer is planning to invest in the stock of Guthrie National Bank.She is examining ratios of the book value of the assets to the market value of the assets and the market value of the bonds held by the bank to their recorded value.What type of risk is Amy attempting to measure with these ratios?

(Multiple Choice)

4.8/5

(37)

Question 14

The following financial information pertains to Harrison Bank. Net Profit Margin 12.5\% Net Income \ 1000 Total Assets \ 62,500 Total Equity \ 6250 -What is the bank's ROE?

(Multiple Choice)

4.8/5

(23)

Question 15

The ratio of cash and government securities to total assets is considered to be a measure of liquidity risk in banking.

(True/False)

4.8/5

(40)

Question 16

According to the textbook,the most profitable U.S.banks in terms of both ROA and ROE are medium-size institutions in the asset size range of $100 million to $10 billion.

(True/False)

4.7/5

(43)

Question 17

Following is the information listed below for Carter State Bank.What is the bank's net profit margin? Net income \ 55 million Total operating revenue \ 650 million Total assets \ 4,055 million Total equity capital \ 350 million

(Multiple Choice)

4.8/5

(41)

Question 18

A bank's ROA equals its ROE times the ratio of total assets divided by total equity capital.

(True/False)

4.9/5

(37)

Question 19

__________________________ is the risk that a financial institution may not be able to meet the needs for cash of its depositors.

(Short Answer)

4.8/5

(33)

Question 20

Showing 1 - 20 of 118

One of the principal components of evaluating ROE is _____________________ ratio,which reflects a bank's portfolio management policies and the mix and yield on its assets.

Which of the following ratios would be a measure of credit risk?

If the discount factor associated with the value of a bank's stock rises,the bank's stock price should rise,other factors held constant.

Following data pertains to Castle State Bank. -What is the bank's ROA?

The Smith-James Bank has an ROE of 17.5%,an asset utilization ratio of 13%,and a net profit margin of 9%.What is the bank's equity multiplier?

__________________________ is the risk that shifting interest rates in the market will adversely affect a financial institution's net income or the value of its assets or equity.

The risk of deterioration in the value of a financial firm's assets as a result of fluctuating currency prices is known as:

The following financial information pertains to Harrison Bank. Net Profit Margin 12.5\% Net Income \ 1000 Total Assets \ 62,500 Total Equity \ 6250 -What is the bank's ROA?

The Smith-James Bank has an ROE of 17.5%,an asset utilization ratio of 13%,and a net profit margin of 9%.What is the bank's ROA?

________________________ is the uncertainty associated with public opinion.Negative publicity (whether true or not)can affect a financial firm's earnings by dissuading customers from using the services of the institution.

The main reason behind the failure of Superior Bank of Chicago and eventual FDIC's takeover of this institution in 2001 was attributed to misleading accounting practices of inflating asset values and revenues deflating liabilities and expenses.

What is the equity multiplier for a bank whose equity is equal to 10 percent of total assets?

The ratio of non-performing assets to total loans and leases is a measure of credit risk in banking industry.

The following financial information pertains to Harrison Bank. Net Profit Margin 12.5\% Net Income \ 1000 Total Assets \ 62,500 Total Equity \ 6250 -What is the bank's ROE?

The ratio of cash and government securities to total assets is considered to be a measure of liquidity risk in banking.

According to the textbook,the most profitable U.S.banks in terms of both ROA and ROE are medium-size institutions in the asset size range of $100 million to $10 billion.

Following is the information listed below for Carter State Bank.What is the bank's net profit margin? Net income \ 55 million Total operating revenue \ 650 million Total assets \ 4,055 million Total equity capital \ 350 million

A bank's ROA equals its ROE times the ratio of total assets divided by total equity capital.

__________________________ is the risk that a financial institution may not be able to meet the needs for cash of its depositors.

An Overview of the Changing Financial-Services Sector

The Impact of Government Policy and Regulation on the Financial-Services Industry

The Organization and Structure of Banking and the Financial-Services Industry

Establishing New Banks, Branches, ATMs, Telephone Services, and Websites

The Financial Statements of Banks and Their Principal Competitors

Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques

Investment Banking,Insurance,and Other Sources of Fee Income

Risk Management: Asset-Backed Securities, Loan Sales, Credit Standbys, and Credit Derivatives

The Investment Function in Financial-Services Management

Liquidity and Reserves Management: Strategies and Policies

Managing and Pricing Deposit Services

Managing Nondeposit Liabilities

Investment Banking, insurance, and Other Sources of Fee Income

The Management of Capital

Lending Policies and Procedures: Managing Credit Risk

Lending to Business Firms and Pricing Business Loans

Consumer Loans, Credit Cards, and Real Estate Lending

Acquisitions and Mergers in Financial-Services Management

International Banking and the Future of Banking and Financial Services

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