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 equity multiplier?

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

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

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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Brian Smith,the CEO of Carter National Bank,anticipates that interest rates may fall in the future and as a result buys $100 million in 30 year Treasury Bonds for the bank's security portfolio.Instead,interest rates rise,causing the value of these bonds to fall.This would be an example of which of the following types of risk?

(Multiple Choice)

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Question 41

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 equity multiplier?

(Multiple Choice)

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Question 42

One of the traditional measures of earnings efficiency is ________________________ or total interest income over total earnings assets less total interest expenses over total interest bearing bank liabilities.It measures the effectiveness of a firm's intermediation function in the borrowing and lending of money.

(Short Answer)

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Question 43

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

(Multiple Choice)

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Question 44

ROE for a bank indicates:

(Multiple Choice)

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Question 45

According to the textbook,a bank's asset-utilization ratio reflects the mix and yield on a bank's portfolio of assets.

(True/False)

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Question 46

The interest rate spread between market yields on bank debt issues (such as capital notes and CDs)and the market yields on government securities of the same maturity is considered to be a measure of market risk in banking.

(True/False)

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Question 47

The tax-management efficiency ratio consists of:

(Multiple Choice)

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Question 48

The TRC Bank has a net profit margin of 7.5%,an asset utilization ratio of 18%,and an equity multiplier of 20.What is the bank's ROA?

(Multiple Choice)

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Question 49

A bank's asset utilization ratio reflects the effectiveness of the bank's expense management.

(True/False)

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Question 50

Which of the following assets are excluded from the category of risk assets?

(Multiple Choice)

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Question 51

Operational risk includes which of the following?

(Multiple Choice)

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Question 52

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

(Multiple Choice)

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Question 53

The noninterest margin is generally positive for most banks.

(True/False)

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Question 54

According to the textbook,the ratio of a bank's pre-tax net operating income to total operating revenues is a measure of expense-control efficiency.

(True/False)

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Question 55

The risk of a government's ability to repay its debt owed to international lending institutions is known as:

(Multiple Choice)

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Question 56

A bank's degree of asset utilization (AU)or the ratio of total operating revenues to total assets is a measure of asset management efficiency,especially in terms of the mix and yield on assets.

(True/False)

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Question 57

One of the measures of a bank's efficiency and return is "earnings spread".It is calculated by the ratio of total interest income to total liabilities as reduced by the ratio of total interest expenses to total assets.

(True/False)

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Question 58

Paul Smith is planning to invest in the stock of Capital City Bank.He is examining the ratios of interest sensitive assets to interest sensitive liabilities and uninsured deposits to total deposits.What type of risk is Paul attempting to measure with these ratios?

(Multiple Choice)

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Question 59

Carson County State Bank has a ratio of equity capital to total assets of 2.5%.The regulators have asked all banks of similar size to maintain a capital adequacy ratio of 8%.They are making the bank issue new stock in the market.In addition,they are not allowing the bank to issue dividends to their current stockholders.Which type of risk would this be an example of?

(Multiple Choice)

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Question 60

Showing 41 - 60 of 118

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 equity multiplier?

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

ROE for a bank indicates:

According to the textbook,a bank's asset-utilization ratio reflects the mix and yield on a bank's portfolio of assets.

The interest rate spread between market yields on bank debt issues (such as capital notes and CDs)and the market yields on government securities of the same maturity is considered to be a measure of market risk in banking.

The tax-management efficiency ratio consists of:

The TRC Bank has a net profit margin of 7.5%,an asset utilization ratio of 18%,and an equity multiplier of 20.What is the bank's ROA?

A bank's asset utilization ratio reflects the effectiveness of the bank's expense management.

Which of the following assets are excluded from the category of risk assets?

Operational risk includes which of the following?

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

The noninterest margin is generally positive for most banks.

According to the textbook,the ratio of a bank's pre-tax net operating income to total operating revenues is a measure of expense-control efficiency.

The risk of a government's ability to repay its debt owed to international lending institutions is known as:

A bank's degree of asset utilization (AU)or the ratio of total operating revenues to total assets is a measure of asset management efficiency,especially in terms of the mix and yield on assets.

One of the measures of a bank's efficiency and return is "earnings spread".It is calculated by the ratio of total interest income to total liabilities as reduced by the ratio of total interest expenses to total assets.

Paul Smith is planning to invest in the stock of Capital City Bank.He is examining the ratios of interest sensitive assets to interest sensitive liabilities and uninsured deposits to total deposits.What type of risk is Paul attempting to measure with these ratios?

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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