Which of the following is NOT a source of income for a bank?
A.
the interest earned by depositors
B.
investments
C.
loan income from interest
D.
fees for services - ANS A
The difference between what a bank pays in interest and what it receives in interest is called - ANS
Spread
True or F...
Test Questions Banking
Which of the following is NOT a source of income for a bank?
A.
the interest earned by depositors
B.
investments
C.
loan income from interest
D.
fees for services - ANS A
The difference between what a bank pays in interest and what it receives in interest is called - ANS
Spread
True or False:
A Financial intermediary will not take a deposit for a consumer. - ANS False
Total assets minus total liabilities equals - ANS Equity
The loosening of government control is called __________ - ANS Deregulation
True or False:
Return on equity is the ratio of net income to total assets. - ANS False
, About 60 percent of the deposit and loan business in the United States is done by - ANS Commercial
Banks
People who put money into banks are called ________________ - ANS Depositor
True or False:
State Farm Insurance company is an example of a depository institution. - ANS False
True or False:
A bank is a not-for-profit organization. - ANS False
A bank evaluates the ____________ of all customers who apply for loans. - ANS Creditworthiness
Assume that a bank receives a $5,000 deposit from a customer and lends it to another to start a small
business. The bank pays a straight 5% per year interest to the customer and charges 10% per year for
the loan. Calculate the spread for one year. - ANS $250
Banks move money between
Answers:
A. other banks
B.banks and individual customers
C. governments
D. all of the above - ANS D
True or False:
General speaking, banks offer customers fewer services today than they did 20 years ago. - ANS False
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Layer. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.99. You're not tied to anything after your purchase.