Final exam questions

Styles Editing QUESTION TWO Voice Sensitivity Editor Rem Selamat Islamic Bank Berhad (SIBB) just announced its financial report for the year ended 2016. Table below is a summary of CIBB's financial report. (a) Items RM (000) Income Statement Operating Revenue Net Income Expenses Profit after tax and zakat 3,662,444 1,540,333 700,343 543,443 Statement of Financial Position Current Asset Current Liability- Demand deposit Total Debt Total Assets 4,332,300 10,635,054 42,091,092 45,620,442 3,729,590 Total Equity Capital Evaluate SIBB's performance based on the following financial ratios and explain what each ratio means. i. The capability of management in converting assets into net earnings. i. The effectiveness of management to control cost, expenses and service price O Focus 目 (United Kingdom) ENC

QUESTION 3 (a) Contrast between overnight policy rate and base lending rate. (b) “In order to enhance the liquidity of a bank, the bank can securitise its assets.”Elaborate the above statement with example.

Examine 3 important factors that treathen the liquidity management efficiency of contemporary banks

Question 6 The financial markets facilitate the movement of funds from Select one alternative: O Central banks to individual depositors O Surplus agents to deficit agents O Stock markets to shareholders O Insurance companies to Lloyds of London

QUESTION ONE (a)Risk management comes with benefits to the banks and the whole financial system.  State and explain the five benefits of risk management to Banks   (b) Describe the 4T principle of risk management in detail    (c) State and explain the 5Cs of good credit.

What is the ultimate objective of financial management?   Question 7 options:     to ensure the ROA is higher than ROR     to obtain a higher ROR than ROA     to ensure that ROA is higher than the cost of financing     to collect trade receivables faster than the payment of trade and other payables

Question No: 04 This is a subjective question, hence you have to write your answer in the Text-Field given below. "In case of financial institutions along with financial performance financial stability is also very crucial." Discus with suitable illustrations the ratios calculated in order to measure financial stability of a bank.

Q 1Why do bankers closely analyze cash flow statements and/or sources and uses of funds statements in considering credit applications?

One of the following statement is true about strategies of liquidity management Select one: O a. Asset Liquidity Management or Asset Conversion Strategy. This strategy calls for storing liquidity in the form of illiquid assets (T-bills, fed funds loans, CDs, etc.) and selling them when liquidity is needed b. Borrowed Liquidity or Liability Management Strategy. This strategy calls for the bank to purchase or borrow from the money market to cover all of its liquidity needs Balanced Liquidity Strategy. The C. use of liquid asset holdings (Asset Management) O d. No need to follow any strategy for liquidity management

Financial Markets and Institutions, 8e (Mishkin) Chapter 2 Overview of the Financial System 2.1 Multiple Choice 1) Every financial market performs the following function: A) It determines the level of interest rates. B) It allows common stock to be traded. C) It allows loans to be made. D) It channels funds from lenders-savers to borrowers-spenders. Topic: Chapter 2.1 Function of Financial Markets Question Status: Previous Edition 2) Financial markets have the basic function of A) bringing together people with funds to lend and people who want to borrow funds. B) assuring that the swings in the business cycle are less pronounced. C) assuring that governments need never resort to printing money. D) both A and B of the above. E) both B and C of the above. Answer: A Topic: Chapter 2.1 Function of Financial Markets Question Status: Previous Edition 3) Which of the following can be described as involving direct finance? A) A corporation’s stock is traded in an over-the-counter…

QUESTION 5 One of our banks has three loan officers -- one officer handles home and personal loans, one officer handles commercial or business loans, and one officer handles agricultural loans.  This practice is a form of credit risk management known as:   A. Specialization in lending   B. Screening   C. Restrictive covenants

Testbank, Question 25 Common types of short-term finance include: O paid taxes and trade credit. accrued wages and floor-plan finance. O bank overdrafts and trade debit. O commercial bills and bank under-drafts.

Q21

Question 1 The role of the information is important for Your answer: Ofinancial institutions because they summarize essential information about the individual borrower. financial markets because they aggregate information from many sources and communicate it widely. O financial instruments because they summarize essential information about the individual borrower. financial institutions because they aggregate information from many sources and communicate it widely.

Q-3 What are various types of risks a commercial bank may face and how these risks are related to CAMELS ratings?

Which of the following assets would be considered least liquid? Group of answer choices A savings account A checking account An interest-paying checking account A money market mutual fund Series EE US savings bonds

iii. iv. Describe how each of the following helps a bank control its credit risk: 1. Position limits 2. Conditions precedent 3. Loan covenants 4. Risk rating systems

O Mark for Review Question 3 of 30 Based of stock statement, the bank will calculate and the margin to be maintained by the borrower. ODisbursement power Orawing power OCash credit power sanction power

question 4  Which of the regulations and policies have been used to manage the 2008/2009 financial crisis? options   a. Lender of last resort. b. Limit cash withdrawals from the bank account. c. Deposit insurance d. All of the above.

Borrowing cash from the bank causes assets to increase and liabilities to increase Question 1 options: True False

10- Which one of the financial intermediaries act as middlemen between depositors and lenders who are the users of funds? a. Investment bank b. Finance companies c. Commercial bank d. All of the options

Financial Risk Management QUESTION 1 : Protecting Interest Income/Revenue• From the banker’s point of view, when the banker quotes a floating interest, in doing so, the banker is passing on the interest rate risk to the borrower.• What if the banker has to quote a fixed interest rate but his cost of funds are floating?In this case, the customer/borrower faces no risk but the banker does.• Example: As a Credit Officer bank you have agreed to provide a customer with a fixedrate, 3-month, RM 20 million loan 90 days from today. You had priced the loan at 12%annual interest rate.• The following quotes are available in the market.3-month KLIBOR = 9 %3-month KLIBOR futures = 90.0 (matures in 90 days)How would you protect yourself from a rise interest rates?

Q. 3 Briefly explain the five (5) primary methods or models that are commonly used, by banks, to estimate the probability of default (PD) of a borrower. Your answer should also include the key element(s) (regarding their mechanics) of each of these methods.

QUESTION 9 Governments require some banks to conduct stress tests of their financial situation.  What type of financial regulation is this requirement?   A. Assessment of risk management   B. Restrictions on competition   C. Consumer protection   D. Disclosure requirements

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Banking

Question 2  Full explain this question and text typing work only thanks

Question 19 Bank assets tend to have maturities and liquidity than/as bank liabilities. O longer; greater O shorter; lower longer; lower shorter; greater

Banking Question 2 Please use the balance sheet for Bank Alpha to answer the questions. Assume Bank Alpha loans all of its excess reserves, and the assets and liabilities balance on the balance sheet. Show all work. Bank Alpha Assets Liabilities Required Reserves Checking Deposits $5,000.00 X Loans $27,000.00 Saving Deposits $25,000.00 a. How much is X, the dollar amount of reserves? b. How much is the required reserve ratio? How much is the M ? Assume Bank Alpha loans its excess reserves to Bank Beta. Next Bank Beta loans their excess reserves to Bank Gamma. Please create balance sheets for Banks Beta and Gamma. Assume there are no excess reserves in this banking system. C. d. How much total money stock created in this banking system? е. What is the total of M1 for Bank Alpha? M2?

QUESTION 1 Banking sector plays an important role in sustaining financial markets and has a significant impact on the success of the economy. Sound financial health of a bank is the guarantee not only to its depositors but is equally significant for the shareholders, employees and whole economy as well. As a sequel to this maxim, efforts have been made from time to time, to measure the financial position of each bank and manage it efficiently and effectively. Required: 1. Using the Mabuchi National bank financial statements below. Discuss and calculate the following performance measures for the year ended 2019. Compare ratios of Mabuchi National bank to average ratios of the other banks within the banking industry. a.)  (NIM) = Net Interest Margin ?  b.)  (NPM) = Net Profit Margin ? c.)  (AU) = Asset Utilisation ? d.) (EM) = Equity Multiplier ? e.) (ROE)Return On Equity & (ROA)Return On Asset ? Useful Information: Income and expense statement for 2019 Mabuchi National Bank are as…