WorksheetsBasics of Banking
Total questions: 17
Worksheet time: 6mins
What is the amount of money banks are required to keep for liquidity?
loans from customers
bank reserves
cash in valut
Banks create money by taking in deposits, making _______, and charging _______.
All financial institutions and banks charge the same types of fees.
True
False
DEFINE interest.
Money paid at a rate for money lent, delaying repayment
Money paid for paying a debt in a timely manner
Money paid for investment success
Money paid for investment failure
When a bank receives initial deposits, it gains an equal amount of reserves, thus, deposit liabilities always equal the reserves.
True
False
Checkable deposits are also called
transaction deposits.
non transaction deposits.
daily transaction deposits.
none of the choices
Which of the following is a bank asset?
savings deposit account
loans from banks
checkable deposits
loans to customers
Most liquid asset of the bank
cash in vault
cash in BSP
cash in other banks
all of the above
Banks make profits through asset transformation.
They borrow short and lend long.
They borrow long and lend short.
They borrow high and lend low.
They don't do anything with their assets.
The most important bank liabilities are
accounts payable
deposit liabilities
loans from other banks
none of the choices
Off balance sheet activities are illegal and should be avoided.
TRUE
FALSE
How do banks compute return on assets (ROA)?
divide the net income of the bank by the amount of its assets
divide the total assets of the bank by the its net income
get the average capital and divide it by the income
none of the choices
Reserves that the bank keep in vault
pay no interest
is not a good cash management
all of the choices
none of the choices
