Question 1

-The minimum total capital for this bank is:

Accepted Answer

A) $348 
B) $450 
C) $509 
D) $581 
E) $696 
A) $348 
B) $450 
C) $509 
D) $581 
E) $696

Question 2

What is "moral hazard" and what is its impact on deposit insurance?

Accepted Answer

Moral hazard refers to the increased ris

Question 3

A bank that holds only U.S.Treasury securities is not required to hold any capital since all the assets are risk-less.

Accepted Answer

A) True 
 B)False

Question 4

Discuss the "three-pillars" in Basel II.

Accepted Answer

Basel II is an international regulatory

Question 5

Use the following information for questions 
  
-The minimum leverage capital for this bank is:

Accepted Answer

A) $348 
B) $450 
C) $509 
D) $581 
E) $696 
A) $348 
B) $450 
C) $509 
D) $581 
E) $696

Question 6

Under the current capital requirements, assets in Category 2, such as repurchase agreements, have an effective total capital-to-total-assets ratio of:

Accepted Answer

A) 1.6%. 
B) 2.0%. 
C) 4.0%. 
D) 8.0%. 
E) 8.6%. 
A) 1.6%. 
B) 2.0%. 
C) 4.0%. 
D) 8.0%. 
E) 8.6%.

Question 7

In general, bank capital ratios have increased over the last 100 years.

Accepted Answer

A) True 
 B)False

Question 8

Prior to the Basle Agreement, capital requirements were established without regard to:

Accepted Answer

A) the bank's liquidity risk. 
B) the bank's asset quality. 
C) the size of the bank's assets. 
D) the bank's operational risk. 
E) the bank's interest rate risk. 
A) the bank's liquidity risk. 
B) the bank's asset quality. 
C) the size of the bank's assets. 
D) the bank's operational risk. 
E) the bank's interest rate risk.

Question 9

Which of the following is a hybrid form of equity that effectively pays dividends that are tax deductible and is considered Tier 1 capital?

Accepted Answer

A) Common stock 
B) Preferred stock 
C) Trust preferred stock 
D) Leases 
E) Trust subordinated debt 
A) Common stock 
B) Preferred stock 
C) Trust preferred stock 
D) Leases 
E) Trust subordinated debt

Question 10

Under the current risk-based capital requirements, banks must hold capital against standby letters of credit they have issued as guarantees.

Accepted Answer

A) True 
 B)False

-The minimum total capital for this bank is:

What is "moral hazard" and what is its impact on deposit insurance?

A bank that holds only U.S.Treasury securities is not required to hold any capital since all the assets are risk-less.

Discuss the "three-pillars" in Basel II.

Use the following information for questions -The minimum leverage capital for this bank is:

Under the current capital requirements, assets in Category 2, such as repurchase agreements, have an effective total capital-to-total-assets ratio of:

In general, bank capital ratios have increased over the last 100 years.

Prior to the Basle Agreement, capital requirements were established without regard to:

Which of the following is a hybrid form of equity that effectively pays dividends that are tax deductible and is considered Tier 1 capital?

Under the current risk-based capital requirements, banks must hold capital against standby letters of credit they have issued as guarantees.

Banking and the Financial Services Industry

Government Policies and Regulation

Analyzing Bank Performance

Managing Noninterest Income and Noninterest Expense

The Performance of Nontraditional Banking Companies

Pricing Fixed-Income Securities

Managing Interest Rate Risk: Gap and Earnings Sensitivity

Managing Interest Rate Risk: Economic Value of Equity

Using Derivatives to Manage Interest Rate Risk

Funding the Bank

Managing Liquidity

Overview of Credit Policy and Loan Characteristics

Evaluating Commercial Loan Requests and Managing Credit Risk

Evaluating Consumer Loans

Managing the Investment Portfolio

Global Banking Activities

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Exam 12: The Effective Use of Capital

-The minimum total capital for this bank is:

What is "moral hazard" and what is its impact on deposit insurance?

A bank that holds only U.S.Treasury securities is not required to hold any capital since all the assets are risk-less.

Discuss the "three-pillars" in Basel II.

Use the following information for questions -The minimum leverage capital for this bank is:

Under the current capital requirements, assets in Category 2, such as repurchase agreements, have an effective total capital-to-total-assets ratio of:

In general, bank capital ratios have increased over the last 100 years.

Prior to the Basle Agreement, capital requirements were established without regard to:

Which of the following is a hybrid form of equity that effectively pays dividends that are tax deductible and is considered Tier 1 capital?

Under the current risk-based capital requirements, banks must hold capital against standby letters of credit they have issued as guarantees.

Banking and the Financial Services Industry

Government Policies and Regulation

Analyzing Bank Performance

Managing Noninterest Income and Noninterest Expense

The Performance of Nontraditional Banking Companies

Pricing Fixed-Income Securities

Managing Interest Rate Risk: Gap and Earnings Sensitivity

Managing Interest Rate Risk: Economic Value of Equity

Using Derivatives to Manage Interest Rate Risk

Funding the Bank

Managing Liquidity

Overview of Credit Policy and Loan Characteristics

Evaluating Commercial Loan Requests and Managing Credit Risk

Evaluating Consumer Loans

Managing the Investment Portfolio

Global Banking Activities

Filters