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Multiple Choice Quiz
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1
A/an ___________________ is what we would also know as a balance sheet.
A)statement of retained earnings.
B)report of income
C)income statement
D)provision for loan loss statement
E)report of condition
2
A type of bank account designed to compete with money market mutual funds, and having limited check-writing services, is known as:
A)wholesale CDs
B)demand deposit
C)repurchase agreement
D)NOW account
E)MMDA
3
The _________________ is the bank's total assets divided by stockholders' equity.
A)ROA
B)ROE
C)net interest margin
D)equity multiplier
E)AU
4
__________________ would encompass fees received by the bank, but not revenues coming from interest charges on loans.
A)Net interest margin
B)Spread
C)Non interest income
D)Non interest expense
E)Core deposits
5
A time deposit found among the liabilities of a bank, having minimum denomination of $100,000 would also be known as a:
A)commercial paper
B)repurchase agreement
C)core deposit
D)retail CD
E)wholesale CD
6
Another name used for a bank income statement is:
A)report of income
B)statement of retained earnings
C)overhead efficiency report
D)report of condition
E)net interest income report
7
Bank-Five has ROE of 17% and ROA of 1.1%. What is Bank-Five's equity multiplier?
A).0647
B)6.47
C).1545
D)15.45
E)15.9
8

Assume the following data for Summer National Bank:

Total Assets

$30 billion

Total Earning Assets

$26 billion

Total Stockholders' Equity

$2.7 billion

Net Income

$0.35 billion

Total Interest Income

$2 billion

Total Interest Expense

$1 billion

Total Non-interest Income

$0.60 billion

Compute Summer National's equity multiplier.
A)85.7
B)11.1
C)0.104
D)0.090
E)0.0117
9

Assume the following data for Summer National Bank:

Total Assets

$30 billion

Total Earning Assets

$26 billion

Total Stockholders' Equity

$2.7 billion

Net Income

$0.35 billion

Total Interest Income

$2 billion

Total Interest Expense

$1 billion

Total Non-interest Income

$0.60 billion

Compute Summer National's net interest income.
A)$3 billion
B)$1 billion
C)$1.6 billion
D)$0.35 billion
E)$2.7 billion
10

Assume the following data for Summer National Bank:

Total Assets

$30 billion

Total Earning Assets

$26 billion

Total Stockholders' Equity

$2.7 billion

Net Income

$0.35 billion

Total Interest Income

$2 billion

Total Interest Expense

$1 billion

Total Non-interest Income

$0.60 billion

Compute Summer National's net interest margin.
A)0.1154
B)0.1296
C)0.0385
D)0.370
E)0.0135
11

Assume the following data for Summer National Bank:

Total Assets

$30 billion

Total Earning Assets

$26 billion

Total Stockholders' Equity

$2.7 billion

Net Income

$0.35 billion

Total Interest Income

$2 billion

Total Interest Expense

$1 billion

Total Non-interest Income

$0.60 billion

Compute Summer National's ROE.
A)0.1296
B)0.0385
C)0.370
D)0.1167
E)11.11
12

Assume the following data for Summer National Bank:

Total Assets

$30 billion

Total Earning Assets

$26 billion

Total Stockholders' Equity

$2.7 billion

Net Income

$0.35 billion

Total Interest Income

$2 billion

Total Interest Expense

$1 billion

Total Non-interest Income

$0.60 billion

Compute Summer National's ROA.
A)0.1296
B)0.0385
C)0.370
D)0.1167
E)11.11
13

Assume the following data for Summer National Bank:

Total Assets

$30 billion

Total Earning Assets

$26 billion

Total Stockholders' Equity

$2.7 billion

Net Income

$0.35 billion

Total Interest Income

$2 billion

Total Interest Expense

$1 billion

Total Non-interest Income

$0.60 billion

Compute Summer National's asset utilization ratio (AU).
A)85.7
B)11.1
C)0.104
D)0.0117
E)0.0867
14
A ________________ bank is one focused on commercial banking relationships.
A)wholesale
B)finance company
C)holding company
D)retail bank
E)credit card
15
Which of the following would not be included within a bank's non-interest income?
A)Fees received for trading assets
B)Fees received for loan commitments
C)Revenue generated from trust department services
D)Service charges on deposit accounts
E)Revenue from interest charged on consumer loans
16
Which of the following most clearly indicates the bank's relative use of debt and equity financing (i.e., the extent of its financial leverage)?
A)Profit margin
B)ROA
C)Net interest margin
D)Equity multiplier (EM)
E)Asset utilization (AU)
17

Consider the following bank data, for Major State Bank:

Equity multiplier

18.00

ROA

1.6%

Profit margin

20.0%

What is this bank's "return on equity"?
A)3.60%
B)28.8%
C)5.76%
D)0.089%
E)8.00%





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