Small banks can participate in loans far in excess of their asset size by a. buying financial futures contracts b. by selling loans downstream c. achieving economies of scope d. buying participations If a firm is using financial leverage successfully, the ROE should be a. lower than if no leverage were used b. higher than the profit margin c. higher than ROA d. higher than if no leverage were used Credit card fee income comes from a. late payments b. exceeding credit lines c. all of the above d. cash advances

Small banks can participate in loans far in excess of their asset size by a. buying financial futures contracts b. by selling loans downstream c. achieving economies of scope d. buying participations If a firm is using financial leverage successfully, the ROE should be a. lower than if no leverage were used b. higher than the profit margin c. higher than ROA d. higher than if no leverage were used Credit card fee income comes from a. late payments b. exceeding credit lines c. all of the above d. cash advances

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter5: Risk Analysis

Section: Chapter Questions

Problem 2QE

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Question

Small banks can participate in loans far in excess of their asset size by

buying financial futures contracts

by selling loans downstream

achieving economies of scope

buying participations

If a firm is using financial leverage successfully, the ROE should be

lower than if no leverage were used

higher than the profit margin

higher than ROA

higher than if no leverage were used

Credit card fee income comes from

late payments

exceeding credit lines

all of the above

cash advances

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