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
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