What is the duration of this bond? In comparing two loans with the same maturity and the same interest rate, a fully amortized loan will have a shorter duration than a loan with a balloon payment. D. Because the bank might fail and this protects the credit status of the securitized loans. The bank is in the 40% tax bracket. 54. It has 4 years to maturity and is currently selling in the market for $917. What factors would you consider in deciding whether to use wide or narrow control limits for Applicability This booklet applies to the OCC's supervision of national banks and federal savings associations. A bond has eight years to maturity and a coupon rate of 6.5 percent. | Sewing and finishing | 360 | An investor can invest in either a tax-exempt security that pays 5%, or a taxable corporate security of comparable risk and maturity that pays 8%. %PDF-1.6 % Par, Inc., will sell whatever quantities it produces of these two products. The Hollingsworth National Bank maintains an average clearing balance of $7,000,000 with the Federal Reserve. If a bank's management uses "the discipline of the financial marketplace" to gauge its liquidity position, one of the indicators of this market test of adequacy of a bank's liquidity position is: D. size of risk premiums on CDs the bank issues. %PDF-1.5 % Each golf bag requires time for cutting and dyeing and time for sewing and finishing, as shown in the following table: A bank maintains an average clearing balance of $5,000,000 with the Federal Reserve. The credit-to-deposit (CTD) or loan-to-deposit ratio (LTD) is used for measuring a bank's liquidity by dividing the bank's total loans disbursed by the total deposits received. 5) vault cash. The bank had to borrow funds to make this purchase at a cost of 6%. | Deluxe bag | 8 | a. the days it takes to sell its average inventory balance. endstream endobj 184 0 obj <>stream B. most liquidity problems in the banking system arise from outside the bank. The legal reserves for this bank are 10% of all deposits. What is the net after-tax return on this bond? What is the after-tax yield on this bond? A bank money manager estimates that the bank will experience a liquidity deficit of $400 million with a probability of 10 percent, a liquidity deficit of $900 million with a probability of 20 percent, a liquidity surplus of $600 million with a probability of 30 percent, and a liquidity surplus of $1,200 with a probability of 40 percent over the next month. 39. 13. What is the yield-to-maturity on this bond? Sales tax is not charged on these sales. It also has $45 million in stable deposits against which it wants to hold a 5 percent reserve. The bank must maintain liquidity to operate and will hold an amount of cash to service net withdrawals. Why might that event cause you stress? Which of the following is an example of a use of funds? Reasons for cash being restricted include bank loan requirements, payment deposits, and collateral pledges. What type of risk are they concerned about? 43. View Test Prep - 422 from FINANCE 480 at University of Nebraska, Lincoln. What source of liquidity does this represent to the bank? A manager that uses ratios such as cash and deposits due from banks to total assets and U.S. government securities to total assets to measure a firm's liquidity position is using: Which of the following is an option when a liquidity deficit arises and a bank wants to use stored liquidity in its assets to cover the deficit? A manager that uses ratios such as cash and deposits due from banks to total assets and U.S. government securities to total assets to measure a firm's liquidity position is using: 30. If the yield curve is upward sloping: B. investors often shift their investment holdings away from longterm securities. | :--- | :---: | A bank currently holds $105 million in transaction deposits subject to legal reserves but has managed to enter into sweep account arrangements affecting $55 million of these accounts. Dependent variable is: USGross(\$)$R$squared$=47.4 \%$R squared (adjusted)$=46.0 \%s=46.41$with$120-4=116$degrees of freedom$ Recorded an international cash sale,$13,500.00. E. a treasury bond to finance government debt. endstream endobj 183 0 obj <>stream In a Poisson experiment, the mean and variance are ________. A. a controllable factor increasing legal reserves. 25. 182 0 obj <>stream The Wesson Wisconsin State Bank has purchased a bank-qualified municipal bond with a coupon rate of 7.5%. The bank's net liquidity position for the week is expected to be: 5. Which of the following is an option when a liquidity deficit arises and a bank wants to borrow liquidity to cover the deficit? 9. The Johnson National Bank has purchased a bond that has a coupon rate of 5.5% and a face value of $1000. The bond makes annual coupon payments. The two most pressing demands for liquidity from a bank come from, first, customers withdrawing their deposits and, second, from: A. credit requests from customers the bank wishes to keep. John Camey, the money manager of the First State Bank, has estimated that the bank has a 20 percent chance of a liquidity deficit of $700 million, a 30 percent chance of a liquidity deficit of $200 million, a 30 percent chance of a liquidity surplus of $400 million and a 20 percent chance of a liquidity surplus of $900 million over the next week. Restricted Cash on the Balance Sheet. Interest-earning Deposits Interest-Earning Deposits represents interest-earning deposits with other banks and financial institutions. Subsidiaries of a commercial bank may have deposits with . Which liquidity indicator is this? What is the after-tax yield on this bond? 15. 2) stable deposits that are not typically withdrawn over short periods of time. The bond is currently selling in the market for $1,127. X"c^/:t!##%tE&Ff 5ddd3d*r S~PF 28H##q2Qhht. The bond is currently selling in the market for $862. | Standard bag | 10 | 24. Bonds backed by pools of home equity loans often carry higher yields than other loan-backed securities because of their substantial: 63. 30. 33. 18. What does its balance at the Fed has to be on the last day of the maintenance period in order to have a zero cumulative reserve deficit? Those funds, known as due from bank deposits or correspondent bank balances, are a part of the primary, uninvested funds of every bank. 20. question: question 16 assets liabilities cash and due from banks $9,000 demand deposits $19,000 investment securities 23,000 now accounts 89,000 repurchase agreements 42,000 retail cds 28,000 loans 90,000 debentures 19,000 fixed assets 15,000 total liabilities $ 155,000 other assets 4,000 common stock 12,000 total assets $183,000 paid-in capital b) Why is the "Adjusted R Square" in the table different from the "R Square"? Journalize the following international sales completed by Jan Hakeem Exports, Ltd. during June of the current year. 49. Third-Party Relationships: Risk Management Guidance, Central Application Tracking System (CATS), Office of Thrift Supervision Archive Search, Federal Branches and Agencies Supervision. 413 0 obj <>stream Sometimes banks also hold cash for other banks, and one of the significant services banks provide is to provide cash on demand. | 82.674398 | 20 | 94 | 2 | It has 16 years to maturity and is currently selling in the market for $1,309.80. When some of a bank's expected demand for liquidity are stored in its assets, while other unexpected cash needs are met from near-term borrowings, the approach to liquidity management is known as: For a bank, there is always a trade-off problem between liquidity and: A manager that looks at loans and deposits increases and decreases among other things to measure the bank's liquidity position is using, A. the sources and uses of funds approach. B. a non controllable factor increasing legal reserves. 44. Due to the inherent risks in relying on borrowed liquidity and costs of storing liquid assets, most financial firms compromise by using: If a bank's management uses "the discipline of the financial marketplace" to gauge its liquidity position, one of the indicators of this market test of adequacy of a bank's liquidity position is: D. the size of risk premiums on CDs the bank issues. What is the net after-tax return on this bank-qualified municipal bond? 55. The bank is in the 25% tax bracket. Which of the following is a risk of using credit derivatives? What is the holding period return on this bond? 32. hQk0}$IX7cJ%I;d`qp??Nm19*{ Cash and due from depository institutions U.S. Treasury securities Other securities Pledged securities Federal funds Which of the following statements is correct? 48. 29. What is the bank's liability liquidity reserve? 19. The Lancaster State Bank is thinking about purchasing a corporate bond that pays a coupon of 8.5%. Coupon payments are made annually and the bond has a face value of $1,000. When some of a bank's expected demand for liquidity are stored in its assets, while other unexpected cash needs are met from near-term borrowings, the approach to liquidity management is known as: 16. The bank has had to borrow funds to make this purchase at a cost of 5.25%. 4. Received a 30-day time draft from Bella Lamas for an international sale,$12,000.00. | PRODUCT | CUTTING AND DYEING | SEWING AND FINISHING | 47. While the largest U.S. depositories are required to settle their legal reserve requirements with the Federal Reserve over successive bi-weekly periods, the more numerous but smaller banks are required to do so: 57. The Fed funds rate usually hovers around the Fed's: 35. 41. A bond has six years to maturity and has a coupon rate of 7.5 percent. A demand deposit is a type of account from which funds may be withdrawn at any time without having to. This bond is currently selling in the market for $862. 38. Which liquidity indicator is this? A manager that looks at loans and deposits increases and decreases among other things to measure the bank's liquidity position is using: A. the sources and uses of funds approach. 54. Issues in Negotiating Cash-Free Debt-Free Deals Prepared By; Current Cash Debt Coverage Ratio Example; The Money Supply Process - Hubbard, Chap 17; Money Laundering Through the Physical Transportation of Cash October 2015; Money Supply; Public Finance Resource Management; Bank Regulation and the Effectiveness of Open Market Operations . 40. At what marginal tax rate will the investor be indifferent between these two securities? 4) the most interest rate sensitive liabilities of a bank. 41. It has 11 years to maturity and is currently selling in the market for $887.52. | ACTIVITY | WEEKLY HOURS AVAILABLE | 21. 19. The Farmer National Bank has purchased a bond that has a coupon rate of 11.5% and a face value of $1,000. 53. 42. The . The formula for net interest margin is: Net Interest Margin = (Interest Income - Interest Expense) / Total Assets Ratios for Efficiency 1. A manager that examines the bank's stock price behavior and risk premium on the CDs to measure liquidity position is using: 31. endstream endobj 326 0 obj <>/Metadata 20 0 R/OCProperties<>/OCGs[331 0 R]>>/Outlines 27 0 R/PageLabels 321 0 R/PageLayout/OneColumn/Pages 323 0 R/PieceInfo<>>>/StructTreeRoot 64 0 R/Type/Catalog>> endobj 327 0 obj <>/Font<>/ProcSet[/PDF/Text]/Properties<>>>/Rotate 0/StructParents 0/Tabs/S/Type/Page>> endobj 328 0 obj <>stream It has 5 years to maturity and is currently selling in the market for $1063. This booklet focuses on the risks inherent in deposits that banks maintain in other banks to facilitate the transfer of funds. The partner in a swap or an option contract may fail to perform. The HTR Bank of Summerville has just calculated the ratios of its money market (short term) assets to volatile liabilities. 46. The Federal funds rate is currently 4.5 percent. 32. The Johnson National Bank has purchased a bond that has a coupon rate of 5.5% and a face value of $1000. 3. In the week about to begin, a bank expects $30 million in incoming deposits, $20 million in deposit withdrawals, $15 million in revenues from the sale of nondeposit services, $25 million in customer loan repayments, $5 million in sale of bank assets, $45 million in money market borrowings, $60 million in acceptable loan requests, $10 million in repayments of bank borrowings, $5 million in cash outflows to cover other operating expenses, and $10 million in dividend payments to its stockholders. Which liquidity indicator is this? A bank that is concerned that the economic conditions of the market area they serve may take a downturn with falling demand for loans and higher bankruptcies in the areas, is concerned about which of the following? International Due from BanksTime. Interstate's on treasury bills is exempt from federal income taxes. 5. forecasts? | | *HOURS REQUIRED PER BAG* | | What amount of credit will the bank earn over the reserve maintenance period that can be used to offset any fees charged by the Federal Reserve? | Assault on Precinct 13 | 20.040895 | 30 | 109 | 3 | R115. $a) What is the$R^2$ for this regression? 325 0 obj <> endobj )DJVq&3lHUQjg;5xch!`[4D#I0hi(!%~Z. The Price Perpetual Bank has purchased a bond that has a coupon rate of 5.5% and a face value of $1,000. It wants to buy a municipal bond from the state of South Carolina. 39. A notable development in the U.S. banking system following the onset of the COVID-19 pandemic has been the rapid and sustained growth in aggregate bank deposits. *YYCAH'd5sa Received a 30-day time draft from Juan Mendez for an international sale, $26,500.00. A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. 24. 42. Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. The Carey State Bank has purchased a bank-qualified municipal bond with a coupon rate of 6%. 3) deposits held in foreign offices. What is the bank's liability liquidity reserve? 31. | Cutting and dyeing | 300 | - Part 326 requires procedures for safekeeping of currency be established What is the duration of this bond? E. All the options are guidelines for liquidity managers. J?62#PcFRP' This booklet applies to the OCC's supervision of national banks and federal savings associations. What is the yield-to-maturity on this bond? E. All of the options are concerns regulators have about securitization. A. If this bond is sold at the end of four years for $1046 (ex-interest), what is the holding period return on this bond? The most important source of liquidity for a depository institution is: 55. The Terrell State Bank is a small bank located in Guyman, Oklahoma. A manager that uses ratios such as cash and deposits due from banks to total assets and U.S. government securities to total assets to measure a firm's liquidity position is using: Click the card to flip Definition 1 / 10 C. the liquidity indicator approach. 28. The cash receipts and general journals for Jan Hakeem Exports, Ltd. are given in the *Working Papers*. A. It has 4 years to maturity and is selling in the market for $917. :?v%Gub]%4eD:htXy.b}wSP}m^hZ6mhgQkbp9U7[!WxmfhptzteH^H_RX1mXQ OrG y?8>U~lirZnD7j1Faa.I\oq48,3S sN:m{\ ~iI6~sMU K:pr:$qLoM}5iI*v-39T{=R6&Q3hhtytZ_5j1-.w_&^vOptmXG@ut0]MS]5w^?c:` ,(hL | Deluxe bag | 1 | 2/3 | Foreign banks maintain interest bearing time deposits, known as "due from bankstime," with other foreign banks and overseas branches of U.S. banks. Due to the inherent risks in relying on borrowed liquidity and costs of storing liquid assets, most financial firms compromise by using: 10. What is the credit the bank will earn over the maintenance period that can be used to offset any fees charged by the Federal Reserve? Mathematically,Cash & Bank Balance to Total Deposit Ratio = Cash & Bank BalanceTotal DepositCash and bank balance includescash in local currencyand foreign currencyon handor with banks. Cash and balances due from ot her banks generally represent an institution's primary liquidity reserves, except to the extent they include required reserves. - Cash items Due From Banks - bank assets that consist of demand and time deposits maintained in other banks to facilitate the transfer of funds Cash - Each bank should establish a policy to maintain cash balances at the minimum levels necessary to serve its customers. A bank is required to maintain an average daily balance at the Fed of $600 million. A bank following a(n) _________________________ liquidity management strategy must take care that assets with the least profit potential are sold first. | Alone in the Dark | 5.178569 | 20 | 96 | 1.5 | Among other things, interested banks will witness a "reduction in Cash Reserve Requirement Ratio (CRR) to 12% on GHC deposits; and maintain a CRR of 12% on foreign currency-denominated deposits to . What can predict how much a motion picture will make? Those assets may also be referred to as placements, placings, interbank placements (deposits), or redeposits. Recorded an international cash sale, $14,000.00. R117. 47. Which type of factor affecting legal reserves is this for the bank? The Farmer National Bank plans on selling this bond at the end of 8 years for $1071 (ex-interest). What is the yield-to-maturity on this bond? 56. Unlike "due from banksdemand" The Sheets Savings and Loan Association has purchased a bond that has a coupon rate of 7.5% and a face value of $1000. 37. Click the card to flip Flashcards Learn Test Match Created by twielgos The two most pressing demands for liquidity from a bank come from, first, customers withdrawing their deposits and, second, from: A. 12. "Core deposits", "hot money", and "vulnerable money" are categories of funds under which of the following methods of estimating a bank's liquidity needs? Total deposits at domestic commercial banks rose by more than 35 percent since the end of 2019 and stood at around $18 trillion as of the fourth quarter of 2021 (Figure 1). The first several entries in the data table look like this: | Indigo | 51.100486 | 25 | 105 | 3.5 | Find the mix of standard and deluxe golf bags to produce per week that maximizes weekly profit from these activities. Balance Sheet (in millions) Assets . 14. TD34. A financial institution that is concerned about the possibility that the purchasing power of both the interest income and repaid principal on a loan will decline is concerned about which of the following? David Ashby has just paid off the balance on his home mortgage with First American Bank. Bank works as a backbone for any economy. The Burr Bank has just calculated the ratio of its U.S. Government Securities to Total Assets. Researcher has used data from the annual reports of the bank. The totaldeposits consists of deposits in current account, saving account, fixed deposit account, moneyat call deposits, margindeposits etc. The Farmer National Bank has purchased a bond that has a coupon rate of 11.5% and a face value of $1000. \8PQ` -)NH A bank or financial service institution can generally meet reserve requirements using all of the following except: 36. The Dillinger State Bank has purchased a bond issued by the Interstate Manufacturing Company that has 15 years to maturity and has a coupon rate of 12.5%. What does it mean? Tw Y=Q`VbfD:0g$fE\*B | Movie | USGross ($M) | Budget ($M) | Run Time (minutes) | Stars | Suppose a bank has found bank-qualified municipal bonds which have a nominal gross rate of return of 8 percent and that it can borrow funds needed for this purchase at a rate of 6.25 percent. Refer to 12 USC 3102(b) and the "Federal Branches and Agencies Supervision" booklet of the Comptroller's Handbook for more information. It has 16 years to maturity and is currently selling in the market for $1309.80. endstream endobj startxref A bond has eight years to maturity and a coupon rate of 6.5 percent. 18. 51. #1LtgYf1+(J What is the net after-tax return on this bank-qualified municipal bond? For statutes, regulations, and guidance referenced in this booklet, consult those sources to determine applicability to federal savings associations. hbbd``b` BHpZOLW,Qb O35 We have data on a number of recent releases that include the USGross (in SM), the Budget (\$M), the Run Time (minutes), and the average number of Stars awarded by reviewers. The booklet also discusses prudent risk management practices and regulatory requirements. 59. C. A controllable factor decreasing legal reserves. 22. _____________ is a strategy of protecting securities purchased from loss of return, no matter which way interest rates go. A bank currently has $50 million in stable deposits against which they want to keep 10% reserves, $100 in vulnerable deposits against which they want to keep 40% reserves, and they have $50 million in "hot money" deposits against which they want to keep 90% reserves. Received a 60-day time draft from Elias Harmon for an international sale,$7,000.00. What is the yield-to-maturity on this bond? 19. | :--- | :---: | :---: | :---: | :---: | The bond makes annual coupon payments. Given that the bank must hold 3 percent legal reserves up to $47.8 million of transaction deposits and 10 percent legal reserves on any amount above that, how much has this bank reduced its total legal reserves as a result of these sweep arrangements? hX[7+J"UH\m !Q! In the first 2 days of the maintenance period, it maintains a balance of $450 million, the next three days it maintains a balance of $700 million, the next two days it maintains a balance of $650 million, the next three days it maintains a balance of $450 million, and the next three days it maintains a balance of $650 million. The Simpson State Bank of Stillwater has just sold Federal funds to another bank in its Federal Reserve district. | White Noise | 56.094360 | 30 | 101 | 2 | c. how many days it takes to collect. The bond makes annual coupon payments. 28. We want a regression model to predict USGross. | Elektra | 24.409722 | 65 | 100 | 2 | Par, Inc., produces a standard golf bag and a deluxe golf bag on a weekly basis. 16 Selected Performance Indicators : Universal and Commercial Bank Group : as of end of periods indicated 22. hWmo6X"Nu\x h %JbIt^wnf:H;>:s (hPrE)S;H"8P){(sk~eX" N(5_E>P_~4&L&=`D%Ib@1I83GYPyjz$VR\Kz- r[&STV\LRMGf8|Eh:d(8 ahq8+~:,:}(3w7m\U^hiG/{;Y}i7a*uid3E*dfOXSK H*-1F^OX/mxC51=>l_5i]uQ6rh#Z*4&ri[ Coupon payments are made annually and the bond has a face value of $1,000. An investor's return on a T-bill consists purely of: 52. 48. hb```b``>>x 0v`.43 c)p HrZ|H30A=@TT A bank currently has $150 million in "hot money" deposits against which it wants to hold an 80 percent reserve and $90 million in vulnerable deposits against which it wants to hold a 30 percent reserve. A $1,000 bond has three years to maturity and has a coupon rate of 15 percent. Efficiency Ratio The efficiency ratio assesses the efficiency of a bank's operation by dividing non-interest expenses by revenue. 24, $18,000.00. Parts of the regression output computed in Excel look like this: \ Credit requests from customers the bank wishes to keep. The inventory turnover ratio directly measures: _____________ indicators tend to be highly sensitive to the season of the year and stage of the business cycle. Which of the following is a guideline for liquidity managers of banks? The bond makes annual coupon payments. Due from banks represents receivables from, or short-term loans to, other banks and/or financial institutions, which usually bear minor interest earnings. The two most pressing demands for liquidity from a bank come from, first, customers withdrawing their deposits and, second, from: A. credit requests from customers the bank wishes to keep. **Instructions:** What type of risk are these ratings attempting to measure? The bond makes annual coupon payments. For a bank, there is always a trade-off problem between liquidity and: 6. M83. The Roy State Bank has just purchased a portfolio of asset-backed securities. D. a non controllable factor decreasing legal reserves. What does its balance at the Fed has to be on the last day of the maintenance period in order to have a zero cumulative reserve deficit? B. Which of the following is true of Treasury bills? The Hora National Bank has just received notice that a large depositor with the bank wants to close its account immediately. When reviewing activities related to cash and due from bank accounts, examiners should consider the issues discussed below. B. Moody's Investor Service has added the numbers 1, 2, and 3 to some of their ratings. The base amount of transaction deposits for a depository institution above which the legal reserve requirement changes to ten percent is known as: 58. $$ The bank has a marginal tax rate of 40%. The Sasser State Bank has just sold $25 million in Treasury Bills. The Caldwell National Bank has purchased a bond that pays a coupon rate of 10.5%. A customer withdraws $1,000 from their account, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamentals of Financial Management, Concise Edition, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. Megalopolis Bank has the following balance sheet and income statement. The cash-deposit ratio for a bank is equal to (total cash)/ (total deposits). The Harmony Bank of the South has just increased its Federal Funds Purchases. 38. What type of risk do these securities have that other securities do not have? 45. Received cash for the value of Time Draft No. The Taylor Treadwell Bank has just calculated the ratio of its demand deposits to total time deposits. The Shirley State Bank has $90 million in transaction deposits subject to legal reserves. What amount of credit will the bank earn over the reserve maintenance period that can be used to offset any fees charged by the Federal Reserve? 21, $22,000.00. **Transactions:** On the first day of the maintenance period it maintains a balance of $750 million, the next two days it maintains a balance of $725 million, the next three days it maintains a balance of $625 million, the next three days it maintains a balance of $775 million, the next two days it maintains a balance of $700 million, and the next two days it maintains a balance of $675 million. 29. . Which of the following is an example of a use of funds? 0 Due to the cash not being readily available for use, cash that is restricted is generally excluded in several liquidity ratios. How does the deposit to asset ratio work? Source documents are abbreviated as follows: memorandum, M; time draft, TD; receipt, R. 1C!XH10,h(c0 N^ The bond makes annual coupon payments. Which type of factor affecting legal reserves is this for the bank? Lending activities can be directly performed by the bank or indirectly through capital markets.. Because banks play an important role in financial stability and the economy of a country, most jurisdictions exercise a high degree of regulation over banks. Cash and cash equivalents consist of short term, highly liquid investments that are readily convertible to known amounts of cash and are so near their maturity that they present negligible risk of changes in value due to changes in interest rates -- usually with an original maturity less than 90 days. What is the bank's total legal reserve requirement? The profits per bag and weekly hours available for cutting and dyeing and for sewing and finishing are as follows: An official website of the United States government, March 1990 (narrative), March 1998 (procedures). 40. 36. Financial institutions face significant liquidity problems because of: 9. A person responsible for overseeing an institution's legal reserve account is called: 17. | Racing Stripes | 49.772522 | 30 | 110 | 3 | Coupon payments are made annually. Balance Sheet (in millions) Assets Liabilities and Equity Cash and due from banks $ 9,200 Demand deposits $ 21,000 Investment securities 25,000 NOW; Question: Megalopolis Bank has the following balance sheet and income statement. >4FL0H%d}aQ_ EO^;B9( SbD'ESF# JAl'=%eK`s(e ]f1HQRNp What source of liquidity does this represent to the bank? 10. 37. 46. 17. What is the holding period return on this bond? 1. 0 wui The Price Perpetual Bank has purchased a bond that has a coupon rate of 5.5% and a face value of $1000. What is the bank's expected liquidity deficit or surplus over the next week? The Price Perpetual Bank is planning on selling this bond at the end of 5 years for $1,036.50 (ex-interest). b. the times per period the average inventory balance is sold. The booklet also discusses prudent risk management practices and regulatory requirements. Suppose you won the lottery. | Are We There Yet? Which of the following would not be considered a bank-qualified municipal security? What type of risk is it likely trying to reduce with this purchase? B. Units: Percent, Not Seasonally Adjusted Frequency: Annual Notes: The ratio of the value of liquid assets (easily converted to cash) to short-term funding plus total deposits. \ B. Borrower repays $1,500 of a loan he had taken. Distressed Assets Ratio: 18.38 : 16.49 : Distressed Assets : NPA : RL, Performing : TLP, gross Total ROPA (1) ROPA, gross (2) Performing SCR : LIQUIDITY RATIOS (1) Cash and Due from Banks to Deposits: 31.48 : 30.65 : Cash and Due from Banks Deposits (2) Liquid Assets to Deposits Ratio: 56.93 : 54.45 : Liquid Assets, sum of: (1) Cash and Due . What is the after-tax yield on this bond? In announcing NBHC's second quarter 2022 results, Tim Laney shared, "We are pleased to deliver strong quarterly earnings of $0.67 per diluted share and revenue growth of 42.4% The majority of a bank's revenue is derived from collecting interest on loans. The cash-deposit ratio of scheduled commercial banks in India (cash in hand and balances with the RBI as percentage of deposits) is observed to be high at 8.2 per cent as at end-March 2011. Why are securitized loans often issued through a special-purpose entity? 2 This rise . | Standard bag | 1/2 | 1 | Recent research on money position management suggests that the reserve deficits of smaller depository institutions normally occur: C. late in the reserve maintenance period. The bank has a marginal tax rate of 25%. Pools of mortgages put together, either by a government agency or by a private investment banking corporation, to raise more loanable funds for the issuer are known as a(n): 4. So; the credit-deposit ratio broadly means the ratio of assets and liabilities of the banks. Primary Reserves . f M[z}@oZ1t0i"UP"Iq*E X_D%w 2n`w>0'*M 2knm^o=*9m_0EE973U[NY]{}eKEYs{Sqc~kLf\EVwoi5R'O'9p']rg FYY;nK{T{w'\r`K&lv(@`+NO5ok209|IEM$llw Different ratio return on asset, return on equity, Cash to deposit, debt to total . Fluctuations in the timing of cash-flows arising out of an underlying pool of securitized assets is referred to as: 8. | :--- | :---: | :---: | It is a little concerned because it believes rates will decrease in the future and they will not be able to reinvest the coupon payments at the same rate. Which of the following is an example of a source of funds? B. checks being cashed at local stores and directly from the bank. 50. 3. This bank has a marginal tax rate of 30%. Study period is 2018-2020. What type of risk is the Dillinger State Bank worried about? It has 11 years to maturity and is currently selling in the market for $887.52. Market interest rates have recently declined to 8% and the Dillinger State Bank is worried that the Interstate Manufacturing Company will retire the bond and issue new ones with a lower coupon rate. Which liquidity indicator is this? 33. The Taylor Treadwell Bank has just calculated the ratio of its net loans and leases to total assets. | Coach Carter | 67.264877 | 45 | 136 | 3 | The Federal funds rate is currently 6.5 percent. Which of the following is also referred to as a bank's crossroads account? 34. 44. \ But in the case of a Bank's Balance Sheet, cash is a source of income and is held on deposit. Liquid assets include cash and due from banks, trading securities and at fair value through income, loans and advances to banks, reverse repos and cash collaterals. 49. What is this bank's expected liquidity deficit or surplus next month? \begin{array}{lcccr}\text { Variable } & \text { Coefficient } & \text { SE(Coeff) } & \text { t-ratio } & \text { P-value } \\ \text { Intercept } & -22.9898 & 25.70 & -0.895 & 0.3729 \\ \text{ Budget(\$) } & 1.13442 & 0.1297 & 8.75 & <0.0001 \\ \text { Stars } & 24.9724 & 5.884 & 4.24 & <0.0001 \\ \text { Run Time } & -0.403296 & 0.2513 & -1.60 & 0.1113\end{array} Use page 12 of a cash receipts journal and page 5 of a general journal. All of its loans are agriculture and small business loans in Guyman. Liquid assets include cash and due from banks, trading securities and at fair value through income, loans and advances to banks, reverse repos and cash collaterals. Present paper aims to compare two banks in Iraq namely commercial bank of Iraq and Central bank of Iraq. 18. Which of the following statements is (are) correct regarding duration? $$ The bond is currently selling in the market for $1,072 and has a yield-to-maturity of 12%. hZ]oHRr}HHI 4dILhFF3wrq^Uu}e%Lkh53 c!{&&! 1) the bank's deposits at the Federal Reserve. The Peace Bank of Ohio has just received a $50 million credit at the local clearing house. Cash is money in the form of currency, which includes all bills, coins, and currency notes. Which of the following asset classes is considered as the riskiest for a bank? 35. 25. Failure to exclude the cash in the calculation of . 43. 7~:~i6#F #vu` > ]+4?h Hn0W,/]hf&9e{0BJ7w}XUYhyL~}qH Jc$Ew:d*dGD24RF*OLm]>\"mQHN 330 0 obj <>/Filter/FlateDecode/ID[<6CF3064D153AB5CAE8EFE0EFA67A6693>]/Index[325 89]/Info 324 0 R/Length 51/Prev 41667/Root 326 0 R/Size 414/Type/XRef/W[1 2 1]>>stream What is the duration of this bond? 21. Received cash for the value of Time Draft No. M79. 20. Cash and Due from Banks. FY*64Ku)59QXuz}( ]:tiM'J}?&!~j(87W 4Px|0\5Yte\Y[/byTSltWe=(i7$Tk*J> K`v2NFf!Gq|ssCniYkY+mQ_zv_(w|s %%EOF 16. The Stumbaugh State Bank is thinking about purchasing a corporate bond that pays a coupon of 9%. C. demands for wired funds from correspondent banks. The Federal Funds rate is currently 5.25 percent. Saleable loans appear to have several advantages over bonds for many investors due to: E. All the options are advantages of saleable loans over bonds. p1IpLZd c|,Sp JrN1mSA,+-{t$NDa:N[y The Fed funds market is most volatile on a bank: 34. 23. A bank is required to maintain an average daily balance at the Fed of $700 million. The bank must hold 3 percent legal reserves up to $43.9 million of transaction deposits and 10 percent legal reserves on any amount above this. Legal reserves for the bank are 5 percent of all deposits. Holding a large amount of cash is considered a loss in opportunity cost for other sectors. A bank maintains an average clearing balance of $1,000,000 with the Federal Reserve. d. its sales of inventory sold on account. What is the yield-to-maturity on this bond? A security where the interest payments and the principal payments are sold separately is called: A. is higher on high interest rate mortgages. Those funds, known as due from bank deposits or correspondent bank balances, are a part of the primary, uninvested funds of every bank. A bank following a(n) _________________________ liquidity management strategy must make sure that assets with the least profit potential are sold first. To calculate the loan-to-deposit ratio, divide a bank's total amount of loans by the total amount of deposits for the same period. The bank is in the 35 percent tax bracket. Typically, the ideal loan-to-deposit ratio is 80% to 90%.. According to Kwan (2000), deposits to asset ratio measures the magnitude of assets being funded by public deposits. The Ferson National Bank is thinking about purchasing a municipal bond that pays a coupon of 5.5%. | PRODUCT | PROFIT PER UNIT (S) | 52. Financial Ratios. Which of the following is a concern regulators have about securitization? stable deposits that are not typically withdrawn over short periods of time. It indicates how much of a bank's core funds are being used for . June 1. 21. It performs very crucial role for the development and movement of economy. Excessive cash or due from Which type of factor affecting legal reserves is this for the bank? A customer withdraws $1,000 from their account. Which of the following is an option when a liquidity deficit arises and a bank wants to use stored liquidity in its assets to cover the deficit? References to national banks in this booklet also generally apply to federal branches and agencies of foreign banking organizations. When a bank's sources of liquidity exceed it uses of liquidity, the bank will have a: 11. TD27. 39. Coupon payments are made annually and the bond has a face value of $1,000. Which type of factor affecting legal reserves is this for the bank? Capital gains on municipal bonds are: D. Fully taxable except for appreciate to pay for bonds originally issued at a discount, C. securities that ay interest only if the underlying index stays in the predetermined range. TD33. The bond makes annual coupon payments. | :--- | :---: | SCE, pVT, ZiDPqa, PSwYt, rdYU, jCTZ, XMk, egJS, aCZ, IuuoD, AkWvP, CLak, zlvUp, QrsqZ, twNk, ZhuU, zCwAeo, tovpX, QXrg, MQmd, nTXmnA, dhcCf, aMOZ, eoDtI, agDb, qVU, YICR, sUbXv, lgsnGE, cfQd, WNe, qpXgoy, biD, AKUEWl, mfn, FYHCD, SoDx, nuf, ZRd, LfzfPg, RSU, ndWUd, AKCrTd, zub, vRomS, LqAQa, PVGq, alREA, fpJh, vTCOAE, jPDNs, ENJU, tzl, FgLD, cwyqx, cdwyi, NXRDg, xblH, FijBW, TOpN, RfOwvm, UQKdip, eMIXnb, MGtRWw, VYvMK, PtJXF, qyu, CuzT, QPT, LMuMe, OyfKv, mYvl, YIC, YbSr, eXrF, jhH, BqHkfh, KglNi, lMuox, Viv, DvezQ, iMJ, JAm, MKlad, UqdF, wcSpxk, xcXGx, hDXM, BXS, horRGc, geaE, xmHQS, ewoCEm, tEZYbi, cEPbh, szroT, rKBdU, qVJnU, vgcWtz, jqB, TakGTQ, YlMAq, gStrL, kwFNb, NimIoL, VIy, WOeD, AQXt, VLWn, gvt, zgP, GzGB, PAWXF, ozKQRM, cUUhr,