50.1K

Verified Solution

Link Copied!

5) Current bank regulation could be improved because: A) Regulators rely upon the bank's own risk models to assess market risk B) Depositors of Too-big-to-fail banks have defacto 100% insurance coverage, regardless of FDIC limits C) Operational risk does not receive enough attention. D) All of the above 5) Which would be the most expensive source of liquidity for a bank? A) Vault Cash B) High-quality commercial paper issued by major corporations C) liability liquidity provided by federal funds borrowed D) fed funds sold With two days remaining in which they could take action, a bank realizes that it will likely fall 1% short of meeting its reserve requirement for the current month.. All of the following are appropriate courses of action EXCEPT: A) They could borrow at the discount window B) they could buy Fed funds C) they could pay down loans from the Federal Reserve D) they could ignore fixing the lack of reserves and it would be added to required reserves in the next month All are factors that affect Net Interest Income, EXCEPT: A) Interest rates C) Volume of Assets B) Composition (Mix) of Assets D) FDIC assessments The Board of Directors directed the Asset & Liability Committee to set the range for permissible GAP as a percent of earning assets to be plus or minus 15%. Rate sensitive assets are $30 million, rate sensitive liabilities are $200 million, earning assets are $974 million. If rates subsequently rise sharply: A) The positioning was acceptable per the Board guidelines and was profitable. B) Despite violating the directive, the positioning was profitable. The Committee will be forgiven. C) The Committee was outside the bounds of the directive, lost the bank money, and perhaps their jobs. D) Despite losing money with the positioning, the Committee was within the acceptable range. 3

Answer & Explanation Solved by verified expert

See Answer