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FINC 4330 EXAM 1 NENNINGER QUESTIONS WITH CORRECT ANS!!
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FINC 4330 EXAM 1 NENNINGER QUESTIONS WITH CORRECT ANS!!
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FINC 4330 EXAM 1 NENNINGER QUESTIONSWITH CORRECT ANS!!
How is the US banking system different from the European system? Answer - -
Europe has 6 to 9 banks per nation while the US has about 7000
-Over 90% are community banks.
Briefly explain the basic idea of how banks earn a profit. Answer - Primary
income comes from loans; banks by money at one price and sell it at a higher
price.
What is meant by saying that loan growth is cyclical? Answer - it goes through
cycles
What are some of the important items that a loan officer needs to understand
about a potential or current client's business? Answer - -how the business is
managed -what the business' products are -how the products/services are
made or provided
-what the local and national economic prognosis is and how it will affect the
business.
What are some of the personal characteristics that make up a good business
banker? Answer - -Ability to communicate
-Ability to listen & observe**
-Have empathy
-Positive attitude
-Ethical
, -Analytical ability & math aptitude
-Risk Taker**
-Common sense
-Motivation to sell
Explain the roles of owners (shareholders) Answer - Select the board of
directors
Explain the roles of the board of directors Answer - -Sets policies
- Reviews Overall operation of bank
-Selects CEO/Management team
Explain the roles of bank management. Answer - -Implements policies
-establishes procedures to implement policies
-day-to-day management of bank
What is the purpose of loan review? Answer - -To identify loans with problem
potential
-Determine compliance with policies, laws, rules, and regulations
-evaluate overall quality of loan portfolio
-Assess adequacy of loan loss provision
-evaluate competence of bank's loan officers
What is a financial intermediary and how does it function as one? Answer -
Accepts deposits from savers and loans the deposits to borrowers through an
indirect process such as a "bank" instead of directly from the the source.
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