Pro Banker Test 2025/2026 QUESTIONS AND ANSWERS
GUARANTEE A+
what decisions to make for interest rates charged on deposits?
have specific numbers and support with evidence and logic - talk about elasticity and look at
what has happened in previous quarters and explain how that affects your decision and how I
expect that to change things in the future
- Overall the margin needed to be a little bigger so that the bank could make more profit, I
thought getting back to more standard deposit rates would be a good thing to do
we like: - - assets with high yield
- liabilities with low cost
- increase in net income, ROA and ROE
what can bank do to increase their net income in future periods? - - loan demand is elastic and
will change with rate changes. keep this in mind when picking a deposit rate and loan rate.
- I would increase my loan rate and decrease my deposit rate. bank is getting far too many
deposits for the amount of loans coming in - causing low net income
- reduce noninterest expense: reduce advertising expenses, increase interest rate on loans (leads
to less maintenance fees)
-- bank will have to find a balance of a lower loan rate to get loans and higher deposit rate to get
deposits but still making a margin, and having enough deposits to cover your loans you promise
why did the bank realize an increase in assets from q0 to q1? - bank lowered loan rates on fixed-
rate corporate, floating-rate corporate, consumer, and mortgage loans.
- this lower rate causes a higher demand for loans
- also because of more fed funds purchased?
, why did the bank have an increase in floating-rate corporate loans volume? - bc the "spread" was
smaller
- floating rate loans mature in 2 quarters
- with choosing my spread to be smaller, my customers don't have to pay as much on top of the
"base rate"
with respect to absolute dollar volume, what 2 types of deposits changed the most? - 1. floating-
rate corporate loans + 23,319
2. fixed-rate corporate loans +10,016
reduce noninterest expense - - reduce advertising expenses
- increase interest rate on loans (leads to less loans so less maintenance fees)
elasticity - when the increase in price for a product reduces the overall demand of the product
do regulators worry more about being overfunded or underfunded? - UNDERfunded
purpose on decision questions - make the best educated guess to RAISE interest INCOME
- always have logic behind your answer
if loan rates go UP and deposit rates go DOWN?? - margins? go UP
- costs go down and income (from loans) goes up
size of bank assets? go DOWN
- you are making fewer loans and attracting less deposits
uses - - decrease in liabilities
- increase in assets
GUARANTEE A+
what decisions to make for interest rates charged on deposits?
have specific numbers and support with evidence and logic - talk about elasticity and look at
what has happened in previous quarters and explain how that affects your decision and how I
expect that to change things in the future
- Overall the margin needed to be a little bigger so that the bank could make more profit, I
thought getting back to more standard deposit rates would be a good thing to do
we like: - - assets with high yield
- liabilities with low cost
- increase in net income, ROA and ROE
what can bank do to increase their net income in future periods? - - loan demand is elastic and
will change with rate changes. keep this in mind when picking a deposit rate and loan rate.
- I would increase my loan rate and decrease my deposit rate. bank is getting far too many
deposits for the amount of loans coming in - causing low net income
- reduce noninterest expense: reduce advertising expenses, increase interest rate on loans (leads
to less maintenance fees)
-- bank will have to find a balance of a lower loan rate to get loans and higher deposit rate to get
deposits but still making a margin, and having enough deposits to cover your loans you promise
why did the bank realize an increase in assets from q0 to q1? - bank lowered loan rates on fixed-
rate corporate, floating-rate corporate, consumer, and mortgage loans.
- this lower rate causes a higher demand for loans
- also because of more fed funds purchased?
, why did the bank have an increase in floating-rate corporate loans volume? - bc the "spread" was
smaller
- floating rate loans mature in 2 quarters
- with choosing my spread to be smaller, my customers don't have to pay as much on top of the
"base rate"
with respect to absolute dollar volume, what 2 types of deposits changed the most? - 1. floating-
rate corporate loans + 23,319
2. fixed-rate corporate loans +10,016
reduce noninterest expense - - reduce advertising expenses
- increase interest rate on loans (leads to less loans so less maintenance fees)
elasticity - when the increase in price for a product reduces the overall demand of the product
do regulators worry more about being overfunded or underfunded? - UNDERfunded
purpose on decision questions - make the best educated guess to RAISE interest INCOME
- always have logic behind your answer
if loan rates go UP and deposit rates go DOWN?? - margins? go UP
- costs go down and income (from loans) goes up
size of bank assets? go DOWN
- you are making fewer loans and attracting less deposits
uses - - decrease in liabilities
- increase in assets
