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Multiple Choice Quiz
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1
The difference between a bank’s assets and its liabilities is the bank’s capital or net worth.
A)True
B)False
2
Return on assets is a measure of bank profitability which is also called return on equity.
A)True
B)False
3
Off-balance-sheet activities create risk for financial institutions.
A)True
B)False
4
Banks manage liquidity risk by examining borrowers’ credit histories.
A)True
B)False
5
Gap analysis is used by banks to manage interest-rate risk.
A)True
B)False







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