1. Core deposits are deposits that are

• A) At the bank solely for the interest rate earned

• B) Very stable funds sources

• C) Typically for larger denominations than hot money sources

• D) Very frequently turned over

2. A construction firm cannot obtain the necessary permits to begin building a shopping mall until it can show it either has or will have the necessary funding to complete the project. The firm may ask a bank for which of the following to allow it to obtain thepermits?

I. Commercial letter of credit

II. Loan commitment

III. Credit line

IV. Repurchase agreement

• A) I or II

• B) II or III

• C) II or IV

• D) III or IV

• E) I or IV

3. Which one of the following is the definition of the 'spread?'

• A) (Net Interest Income--Net Noninterest income) / Earning Assets

• B) Net Interest Income / Interest Bearing Liabilities

• C) (Interest Income--Interest Expense) / Earning Assets

• D) (Interest Income--Interest Expense) / Interest Bearing Liabilities

• E) (Interest Income / Earning Assets)--(Interest Expense / Interest Bearing Liabilities)

4. Interest bearing retail accounts with limited checking features designed to compete with money market mutual fund investments are called___________.

• A) NOWs

• B) Retail CDs

• C) MMDAs

• D) Special savings deposits

• E) Negotiable CDs

5. A bank has an interest income to total assets ratio of 5% and has a noninterest income of $30 million and total assets of $750 million. What is the bank's asset utilization ratio?

• A) 5.0%

• B) 9.0%

• C) 7.5%

• D) 6.3%

• E) 8.2%

6. The largest source of income at a typical bank is

• A) Interest income on securities held for sale

• B) Interest income on securities held for investment

• C) Interest income on loans and leases

• D) Non-interest income

• E) Dividends or stock

7. The bank's ROA is

• A) 1.31%

• B) 1.78%

• C) 1.65%

• D) 0.89%

• E) None of the above

8. The bank's profit margin is

• A) 30.04%

• B) 27.27%

• C) 23.08%

• D) 21.31%

• E) None of the above

9. If the average net interest margin for this type of bank is 4.65%, then, ceteris paribus,this particular bank is performing.

• A) The same as average because this bank has a NIM of 4.65%

• B) Better than average because this bank has a NIM of 6.55%

• C) Better than average because this bank has a NIM of 5.23%

• D) Poorer than average because this bank has a NIM of 3.64%

• E) One can't determine with the information given

10. The largest market available for purchased funds is the

• A) Wholesale CD market

• B) Eurodollar deposit market

• C) Banker's acceptances market

• D) Discount window purchases

• E) Fed funds market