100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
FIN 324 Actual Exam Questions With Correct Detailed Answers Guaranteed Success. $17.49   Add to cart

Exam (elaborations)

FIN 324 Actual Exam Questions With Correct Detailed Answers Guaranteed Success.

 6 views  0 purchase
  • Course
  • FIN.
  • Institution
  • FIN.

What are some risks banks take? - correct answer Market - Interest rates - Changes in values from changes in interest rates - Macroeconomic - outside of bank control Credit - Can the company afford to repay the loans (or interest) Operational - Tech b...

[Show more]

Preview 4 out of 54  pages

  • September 8, 2024
  • 54
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • FIN.
  • FIN.
avatar-seller
RealGrades
FIN 324
What are some risks banks take? - correct answer Market

- Interest rates

- Changes in values from changes in interest rates

- Macroeconomic - outside of bank control



Credit

- Can the company afford to repay the loans (or interest)



Operational

- Tech breakdowns



Regulatory

- Not adhering to rules (how they have to behave)



Reputational

- Bank taking on a company that benefits shareholders but upheaves stockholders

A bank closing a public item for missing payments

Funding oil or guns productions



Legal

- Fines, penalties, possible shutdown



What are some maco risks a bank could take? - correct answer Political

- Political risks of the location you are in

,Country or Sovereign

- Understand the correlation of each different country



Economic



What are some additional firm specific risks? - correct answer · Interest Rate Risk
(ALM)



· Off-Balance Sheet

o Contingency liable

o Found in footnotes



· Liquidity

o Do I have enough assets turning into cash to repay liabilities when they are due, and can I do that
without stress



· Insolvency

o Value of my assets is lower than my liabilities



· Capital

o Not just equity



What is regulated? - correct answer Activities



Liquidity

- Liquidity Coverage Ratio

- Net Stable Funding Ratio



Capital - proportional to the risks it takes

,- Risk-Weighted Assets

- Not nominal value

- Tier I, Tier II, Tier III

- B rating 34-40 % default



How do banks make money? - correct answer Making money by taking risks

· By investing and buying risky things



Identify & Manage Risk, Not avoid risk

· Need to take risk to make money



What is the retail product set? - correct answer Consumer/Retail Deposits, Checking
Accounts



ATM, Online Banking



Loans: Credit Card, House, Car, Student



What is the wholesale product set? - correct answer Cash management



Treasury Services

- Derivative transactions to hedge rates



Loans



What are the two ways to extend credit? - correct answer Fixed rate loans &
Floating rate loans



Fixed Rate Loans - correct answer Cost of Funds

, Spread



(Net Interest Income) difference between what I take in and what I pay out to depositors

- What the loan accrues at and what is takes for me to get money



Floating Rate Loans - correct answer Index: SOFR - MAIN



Spread



(Earn over time)



Describe bank fees - correct answer Why fees? Receive the upfront before we do
something

· Lending

· Origination Fee

· Renewal Fee

· Commitment fee

- line of credit (needs revenue to offset the possibility of you sending)

· Waiver Fee



Product: Fees (clearing checks, maintaining accounts)



What is on a typical Commercial Bank Balance Sheet: Assets - correct answer Total
Assets:

· Cash

· Marketable Securities

· Loans

· PPE

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

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

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

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 RealGrades. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $17.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

73314 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$17.49
  • (0)
  Add to cart