BFIN 357 Final Exam with correct answers 100% 2026

BFIN 357 Final Exam with correct answers 100% 2026 An increase in interest rates could reduce a commercial bank's expected cash flows because the interest paid on deposits may increase to a greater degree than the interest earned on loans and investments. a. True b. False - Correct Answer a. True Whether a bank has a temporary or a permanent need for funds, the decision should be to borrow in the federal funds market. a. True b. False - Correct Answer b. False Prussian Bank has assets with an average duration of 2.78 years and liabilities with an average duration of 3.00 years. The market value of Prussian's assets is $100 million, and the market value of Prussian's liabilities is $150 million. Prussian's duration gap is a. -1.72. b. 0.78. c. 1.72. d. 1.17. e. None of these choices are correct. - Correct Answer a. -1.72 The value of a commercial bank can be modeled as the present vale of its future cash flows. a. True b. False - Correct Answer a. True Which of the following was not a provision of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA)? a. the allowance of checkable deposits for all depository institutions b. new lending flexibility for depository institutions c. the phaseout of deposit rate ceilings d. the permission of depository institutions to offer money market deposit accounts (MMDAs) e. All of these choices were provisions of DIDMCA. - Correct Answer d. the permission of depository institutions to offer money market deposit accounts (MMDAs) Shortly after the Reigle-Neal Act was passed, many interstate banks divided their operations so that their branches reported to the state subsidiaries rather than to the main holding company. a. True b. False - Correct Answer b. False If the risk premium on a commercial bank rises, so will the required rate of return by investors who invest in the bank. a. True b. False - Correct Answer a. True The loan loss provision should increase during periods when loan losses are more likely, such as during a recessionary period. a. True b. False - Correct Answer a. True A bank can usually simultaneously maximize its return on assets and minimize credit risk. a. True b. False - Correct Answer b. False Banks with relatively ________ ROAs often incur ________ noninterest expenses. a. Answer [low; excessive] and [high; few] are correct. b. high; excessive c. high; few d. low; excessive e. low; few - Correct Answer a. Answer [low; excessive] and [high; few] are correct. The largest 100 banks account for about ________ percent of all bank assets.