FIN 305 TEST BANK FINAL EXAM 2 2026-2027 \ACTUAL
PRACTICE EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS (100% CORRECT VERIFIED
SOLUTIONS) A NEW UPDATED VERSION |ALREADY
GRADED A+ BEST DOCUMENT FOR EXAM PREP
The number of banks in the U.S. has been declining over the last
30-40 years
primarily because:
A) More banks fail each year than there are new banks
founded/chartered
B) A high rate of mergers and acquisitions in the industry
B) A high rate of mergers and acquisitions in the industry
Bank of America's largest source of interest income is:
A) Loans and leases
B) Investment securities
A) Loans and leases
For the typical bank that is profitable, we would observe that:
A) ROA > ROE
B) ROE > ROA
B) ROE > ROA
,Assume a bank's Profit Margin is 20%, its Asset Utilization is 5%, its
Total Assets are $1 Billion, and its Equity Capital is $100 Million.
What is the bank's ROE?
10%
ROE = PM x AU X EM
= 0.20.0510
=10%
Heartland Bank and Trust Case Study
Lecture 14: Slides 27-33 (DO!)
You have a defined benefit pension plan. In the last few years
of your career, you received a large promotion and raise.
Hopefully, your DB pension plan uses the:
A. Flat benefit formula
B. Career average formula
C. Final pay formula
C. Final pay formula
,In DC plans, the ______ bear the risk associated with asset
returns, and these plans tend to hold a share of equity
investments.
A. employers; lower
B. employers; higher
C. workers; lower
D. workers; higher
D. workers; higher
If you expect your tax bracket in retirement to be much lower
than it is today, a ______ IRA would be a better option.
A. Traditional
B. Roth
A. Traditional
, Suppose today a mutual fund contains 4,000 shares of Firm A
trading at $20, 1,200 shares of Firm B trading at $77, and 1,600
shares of
Firm C trading at $31. The fund has no liabilities and has 15,000
shares outstanding held by investors. What is the mutual fund's
NAV today?
NAV = ( (400020) + (120077) + (1600*31) )/ 15000
= $14.80
Investment banking services center around the market,
whereas securities services center around the market.
A. Secondary; Primary
B. Retail; Commercial
C. Primary; Secondary
C. Primary; Secondary
Consolidation in the investment banking industry has been driven by:
A. Many IBs failing each year
B. Regulatory changes and mergers
C. State laws limiting new IB formation
B. Regulatory changes and mergers
PRACTICE EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS (100% CORRECT VERIFIED
SOLUTIONS) A NEW UPDATED VERSION |ALREADY
GRADED A+ BEST DOCUMENT FOR EXAM PREP
The number of banks in the U.S. has been declining over the last
30-40 years
primarily because:
A) More banks fail each year than there are new banks
founded/chartered
B) A high rate of mergers and acquisitions in the industry
B) A high rate of mergers and acquisitions in the industry
Bank of America's largest source of interest income is:
A) Loans and leases
B) Investment securities
A) Loans and leases
For the typical bank that is profitable, we would observe that:
A) ROA > ROE
B) ROE > ROA
B) ROE > ROA
,Assume a bank's Profit Margin is 20%, its Asset Utilization is 5%, its
Total Assets are $1 Billion, and its Equity Capital is $100 Million.
What is the bank's ROE?
10%
ROE = PM x AU X EM
= 0.20.0510
=10%
Heartland Bank and Trust Case Study
Lecture 14: Slides 27-33 (DO!)
You have a defined benefit pension plan. In the last few years
of your career, you received a large promotion and raise.
Hopefully, your DB pension plan uses the:
A. Flat benefit formula
B. Career average formula
C. Final pay formula
C. Final pay formula
,In DC plans, the ______ bear the risk associated with asset
returns, and these plans tend to hold a share of equity
investments.
A. employers; lower
B. employers; higher
C. workers; lower
D. workers; higher
D. workers; higher
If you expect your tax bracket in retirement to be much lower
than it is today, a ______ IRA would be a better option.
A. Traditional
B. Roth
A. Traditional
, Suppose today a mutual fund contains 4,000 shares of Firm A
trading at $20, 1,200 shares of Firm B trading at $77, and 1,600
shares of
Firm C trading at $31. The fund has no liabilities and has 15,000
shares outstanding held by investors. What is the mutual fund's
NAV today?
NAV = ( (400020) + (120077) + (1600*31) )/ 15000
= $14.80
Investment banking services center around the market,
whereas securities services center around the market.
A. Secondary; Primary
B. Retail; Commercial
C. Primary; Secondary
C. Primary; Secondary
Consolidation in the investment banking industry has been driven by:
A. Many IBs failing each year
B. Regulatory changes and mergers
C. State laws limiting new IB formation
B. Regulatory changes and mergers
