ECO 4223 FINAL PT 2 QUESTIONS AND CORRECT ANSWERS

1 of 33

Term Definition



Which of the following are bank A
assets?
A. the building owned by the
bank
B. discount CD




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True False




2 of 33

Term Definition



For a given return on assets, the A
lower the bank capital:
A. the lower the return for the

,owners of the bank
B. the higher is the return for the
owners of the bank

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True False



Correct definition



B




3 of 33

Term Definition



Bank capital has both benefits A
and costs for the bank owners.
Higher bank capital _______ the
likelihood of bankruptcy, but
higher bank capital _____________
the return on equity for a given
return on assets.
A. increases; increases
B. reduces; reduces

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True False



Correct definition

, B



4 of 33

Term Definition



When a bank receives the funds B
for a deposited check:
A. cash items in the process of
collection fall by the amount of
the check
B. bank liabilities decrease by
the amount of he check

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True False



Correct definition



A




5 of 33

Term Definition



Which of the following are B
reported as liabilities on a banks
balance sheet?
A. loans
B. checkable deposits