PRINCIPLES OF BANKING REVISION EXAMS
ANSWERS AND QUESTIONS SET A+
✔✔Primary market - ✔✔What market is used to offer new stock to the public for the first
time?
✔✔Statement of conditions - ✔✔What financial report is a detailed list of assets,
liabilities, and capital accounts, showing the financial status of the bank as of a given
date?
✔✔Asset - ✔✔On a bank statement of condition, what is a loan considered?
✔✔Treasury notes - ✔✔Which of the following is the most liquid?
✔✔Primary reserves - ✔✔What type of reserves consists of cash on hand, demand
deposit balances at correspondent banks, and reserves kept at the Federal Reserve?
✔✔Credit risk - ✔✔What is the possibility that a borrower will not repay the principal and
interest of a loan when due?
✔✔Discount rate - ✔✔What is the interest rate the Federal Reserve charges banks for
the use of its funds?
✔✔10 percent - ✔✔What is the return on equity (ROE) for a bank with total equity of
$120,000,000 and a net profit of $12,000,000?
✔✔Generally Accepted Accounting Principles (GAAP) - ✔✔An audit should be
performed in accordance with:
✔✔Balance sheet - ✔✔A statement of condition is also known as a
✔✔Profitability - ✔✔What marketing pillar holds that banks build value into products and
services can attract more customers at higher prices?
ANSWERS AND QUESTIONS SET A+
✔✔Primary market - ✔✔What market is used to offer new stock to the public for the first
time?
✔✔Statement of conditions - ✔✔What financial report is a detailed list of assets,
liabilities, and capital accounts, showing the financial status of the bank as of a given
date?
✔✔Asset - ✔✔On a bank statement of condition, what is a loan considered?
✔✔Treasury notes - ✔✔Which of the following is the most liquid?
✔✔Primary reserves - ✔✔What type of reserves consists of cash on hand, demand
deposit balances at correspondent banks, and reserves kept at the Federal Reserve?
✔✔Credit risk - ✔✔What is the possibility that a borrower will not repay the principal and
interest of a loan when due?
✔✔Discount rate - ✔✔What is the interest rate the Federal Reserve charges banks for
the use of its funds?
✔✔10 percent - ✔✔What is the return on equity (ROE) for a bank with total equity of
$120,000,000 and a net profit of $12,000,000?
✔✔Generally Accepted Accounting Principles (GAAP) - ✔✔An audit should be
performed in accordance with:
✔✔Balance sheet - ✔✔A statement of condition is also known as a
✔✔Profitability - ✔✔What marketing pillar holds that banks build value into products and
services can attract more customers at higher prices?
