REVIEW ON CONCEPTS (Chapter 11-17)
Chapter 11
1. What is the largest liabilities account on a typical bank’s balance sheet?
2. What is the largest single category of loans on the typical bank’s balance sheet in 2004?
3. In terms of profitability, what level of ROA a well-run bank usually has?
4. What is economy of scale? What is economy of scope? What is X efficiency?
5. Who are the key federal regulators of the banking industry?
6. As a percentage of the typical bank’s balance sheet, over the last 50 years, ______have risen and ______have fallen.
A)Securities ; consumer loans
B)Business loans ; mortgages
C)Securities ; all loans
D)Mortgages ; securities
E)Consumer loans ; mortgages
7. In comparison to small banks, larger banks typically have
A)More equity capital
B)More core deposits
C)More off balance sheet activities
D)Larger net interest margins
E)All of the above
Chapter 12
1. What is a typical bank’s top interest earning asset category?
2. All but which one of the following is an example of noninterest income or noninterest expense?
A)Income from service charges on deposits
B)Income from trust services
C)Salaries and benefits paid to employees
D)Earnings on securities held for investment
Chapter 13
1. Is BIF/SAIF/NCUSIF managed by the FDIC?
2. What is the Financial Services Modernization Act?
Chapter 14
1. Which type of thrift has the greatest percentage of commercial loans on their balance sheet?
2. Which type of deposit institution has the highest concentration of mortgage related assets on the balance sheet?
3. What is the majority of assets for a typical savings association?
4. Who is the primary regulator for saving institutions after 1989?
5. What is the insurance fund called for deposits at savings banks? What is the insurance fund called for deposits at savings associations?
Chapter 15
1. What is the largest asset category of life insurers? What is the largest liability category?
2. Who is the primary regulator of insurance firms?
3. What is subprime lender?
4. What is the major short-term financial resource for a typical finance company?
Chapter 16
1. What are the seven key activity areas for security firms and investment banks?
2. What is private placement? Best effort underwriting? Firm commitment underwriting?
3. What is program trading? Pure arbitrage?
4. What is the minimum capital to asset ratio are required for firms in the securities industry to maintain?
5. Who are the two regulatory organizations that are involved in day-to-day trading practices of securities firms?
6. What activity areas of securities firms are regulated by the SEC?
Chapter 17
1. What advantages does a typical no-load mutual fund have compared to purchasing a stock?
2. What are hybrid mutual funds?
3. What are open end mutual funds? What is NAV?
4. Which type of mutual fund usually generates a discount or premium?
5. Who is the primary regulator of mutual funds?