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

Net profit margin can be split into two parts,________________________ and tax management efficiency.The first part is pre-tax net operating income over total operating revenue which looks at how many dollars of revenue survive after operating expenses are removed.

As data processing of financial information becomes more important,managers of financial firms can realize cost savings from _______________________,transferring tasks from inside the firm to other firms specializing in information technology.

__________________________ assets of a financial institution are those that will mature or be repriced within a set period of time.

__________________________ reflects the effectiveness of the expense management of a bank and is one of the principal components of evaluating ROE.

The earnings spread for a bank is equal to:

A larger proportion of small and medium-size bank's loans tend to be:

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

ROE for a bank is calculated by:

The cumulative impact of all the risks (market risk,credit risk,operational risk,and legal and compliance risk)put together that can affect a financial firm's long-run survival is often referred to as _________________________.

A bank's profit margin or ratio of net after-tax income to total operating revenue is a measure of financial leverage for a bank.

__________________________ assets,including loans,are those which are past due by 90 days or more.

A bank that has a low profit margin most likely:

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

The ____________________ Act restricts combined auditing and consulting relationships in order to promote auditor independence and objectivity.

Which of the following would be the best example of a ratio used to examine the return on one of a bank's assets?

For a bank,sources of funds like Eurodollars,Fed funds,repurchase agreements,and large CDs are categorized as ____________________.

Liquidity risk examines the quality of a bank's assets and,in particular,the quality of the bank's loans.

Basic principles of financial management suggest that attempting to maximize a bank's stock value is the key objective for banks which should have priority over all other goals.

The value of a bank's stock will tend to rise if the:

The Trust-worthy Bank had declared and paid a dividend of $2 last year.The dividend amount to shareholders is expected to grow at the rate of 10 percent while the minimum acceptable rate for the investors on the bank's stock is 15 percent.What is the price at which the stock of Trust-worthy bank must be valued at in the market?