商业银行管理彼得s.罗斯英文原书第8版英语试题库

1、Chapter 15The Management of CapitalFill in the Blank Questions1. The risk that has to do with banks trading in foreign currencies is calledAnswer: exchange risk2. The risk that has to do with fraud, embezzlement and bank robberies is calledAnswer: crime risk3. is measured by the par value of the sha

2、res of commonequity outstanding.Answer: Common stock4. is the amount in excess of par value paid by the banksshareholders.Answer: Surplus5. are the net earnings of the bank which have been keptby the bank rather than distributed as dividends to stockholders.Answer: Undivided Profits (or retained ear

3、nings)6. Core capital such as common stock, surplus, undivided profits, qualifying noncumulative preferred stock, etc. is referred to as capitalas defined by the Basel agreement.Answer: Tier 17. The international treaty involving the . and 11 other leading industrialized countries to impose common c

4、apital requirements on all banks is known as theAnswer: Basel Agreement8. Supplemental capital such as the allowance for loan losses, subordinated debt, mandatory convertible debt, intermediate-term preferred stock, cumulativepreferred perpetual stock and equity notes is more commonly known asAnswer

5、: Tier 2 capital9. When items on a banks balance sheet are multiplied by the appropriate risk-weighting factor they are often called .Answer: risk-weighted assets10. The fact that a bank may suffer deficiencies in quality control, inefficiencies in producing and delivering of services, weather damag

6、e, aging or faulty computer systems, errors in judgment by management and fluctuations in economy that could adversely affect the banks performance is known as risk.Answer: operational11. One defense against risk for the bank is to spread out a banks credit accounts and deposits amonga wide variety

7、of customers, including large and small accounts different industries, etc. This defense is known as .Answer: portfolio diversification12. One defense against risk is for the bank to seek out customers located in different communities or in different countries. This defense is known asAnswer: geogra

8、phic diversification13. When all else fails, the ultimate defense against risk in banking isAnswer: owners capital (net worth)14. The largest component of capital among thrift institutions is .Answer: retained earnings15. The largest component of capital among banks is .Answer: surplus16. models att

9、empt to measure price or market risk of a portfolio of assetsand attempt to determine the maximumloss they might sustain over a designated period of time.Answer: Value at risk (VaR)17. The latest revision to the Basel accord is known as and will affect onlyabout 20 of the largest . banks and a handf

10、ul of leading foreign banks.Answer: Basel II18. models measure lender exposure to defaults or credit downgrades. Answer: Credit Risk19. Credit risk models will be widely used when Basel II takes effect.Answer: more20. At the center of the debate of the Basel Agreement is the, headquartered in Basel

11、Switzerland , which assists central banks in their transactions with each other and serves as a forum for international financial issues.Answer: Bank for International Settlements (BIS)21. represents funds set aside for contingencies such as legal action against the institution as well as providing

12、a reserve for dividends expected to be paid but not yet declared and a sinking fund to retire stock or debt in the future.Answer: Equity reserves22. are debtsecurities repayable from the sale of stock.Answer: Equity commitment notes23. is a hybrid form ofequity capital issued to investors through a

13、trust company, The funds raise are loaned to the financial firm. Dividends paid to stockholders on this time of capital are tax deductible.Answer: Trust preferred stock24. is long-term debtcapital whose claims legally follow claims of depositors.Answer: Subordinated notes and debentures25. for banks

14、include mortgage servicing rights and purchased credit card relationships and can be counted as part of bank capital.Answer: Identifiable intangible assetsTrue/False QuestionsT F 26. In the field of banking, capital refers principally to those funds contributed by a banks owners.Answer: TrueT F 27.

15、According to the textbook capital and risk are intimately related to each other.Answer: TrueT F 28. One fundamental purpose for regulating capital is to limit losses to the federal government arising from deposit insurance claims.Answer: TrueT F 29. Deposit insurance subsidized by government encoura

16、ges banks to increase their ratios of capital to deposits.Answer: FalseT F 30. Tier 2 includes undivided profits. Answer: FalseT F 31. Core capital includes the surplus account for stock. Answer: TrueT F 32. Under the international capital (Basel) agreement Tier 2 capital must be raised to a minimum

17、 of 4 percent of risk-weighted assets.Answer: FalseT F 33. Off-balance-sheet commitments of banks carry capital requirements under the international (Basel) capital requirements.Answer: TrueT F 34. Portfolio diversification refers to seeking out customers located in different communities or countrie

18、s, which presumably will experience different economic conditions.Answer: FalseF 35. Geographic diversification refers to the spreading out credit accounts anddeposits among a wide variety of customers, including large and small business accounts, different industries, and households with a variety

19、of sources of income and collateral.Answer: FalseT F 36. The last line of defense against bank failure is owners capital, according to the textbook.Answer: TrueT F 37. Under the FDIC Improvement Act of 1991 a . bank possessing a leverage ratio greater than 4 percent would be considered well capitali

20、zed.Answer: FalseT F 38. Under the FDIC Improvement Act of 1991 a bank whose leverage ratio drops to 2 percent or less is considered to be critically undercapitalized.Answer: TrueT F 39. Recent research suggests that interest-rate contracts display considerably less risk exposure than do foreign-cur

21、rency contracts.Answer: TrueT F 40. The Basel Agreement on capital as drafted in the 1980s failed to deal with market risk.Answer: TrueT F 41. If a bank benefits when the value of a foreign currency rises, the bank issaid to be in a short position.Answer: FalseT F 42. If a bank benefits when a forei

22、gn currency declines in value, then the bankis in a long position.Answer: FalseT F 43. If the ratio of tangible equity capital to total assets is 2 percent or less it is subject to being placed in conservatorship or receivership if its capital ratios are not increased within a prescribed period of t

23、ime even if its net worth is still positive.Answer: TrueT F 44. According to recent research, bank stock prices usually drop within a week after a dividend cut is announced.Answer: TrueT F 45. Equity notes are considered to be part of Tier 1 capital. Answer: FalseT F 46. The most important source of

24、 thrift capital in terms of dollar volume is common stock (par value).Answer: FalseT F 47. The daily rate at which robberies have occurred in the . has continued to climb in the 1990s.Answer: FalseT F 48. One of the reasons to regulate the capital position of banks is to limit the risk of bank failu

25、res, especially large bank failures.Answer: TrueT F 49. Deposits with the Federal Reserve banks are considered to have moderatecredit risk and are therefore placed in the 50 percent risk weight category.Answer: FalseT F 50. The largest component of capital among banks is retained earnings. Answer: F

26、alseT F 51. VaRmodels provide a single number which indicates the potential for losses on a portfolio of assets.Answer: TrueT F 52. VaR models are most successful in assessing potential risk when the assets are non-traded.Answer: FalseT F 53. Credit risk models will probably not be needed when Basel

27、 II takes effect.Answer: FalseT F 54. One of the key innovations which have been proposed in Basel II is to require banks to hold capital against operational risk.Answer: TrueT F 55. Basel II will require each bank to determine its own capital requirements based on its own calculated risk exposure.A

28、nswer: TrueT F 56. It is anticipated that Basel II maylower capital requirements for the largest banks.Answer: TrueT F 57. The global financial crisis of 2007-2009 highlighted the importance of taking into consideration a bank s exposure to market risk that arise from changes in interest rates, secu

29、rity prices, and currency.Answer: TrueT F 58. Smaller banks rely more heavily on internally generated capital than larger banks.Answer: TrueT F 59.A well-capitalizedinstitution has a ratio of capital to risk-weighted assetsof at least 10 percent and faces no significant regulatory restrictions on it

30、s expansion.Answer: TrueT F 60. Regulatory capital focus on the market value of equity.Answer: FalseMultiple Choice Questions61. According to the textbook the role of capital is to:A) Provide a cushion against failure risk.B) Provide funds needed to organize, open, and operate a bank.C) Promote publ

31、ic confidenceD) Support growth and the development of new servicesE) All of the above.Answer: E62. The textbook discusses several alternative defenses banks have against risk. These defenses include:A) Quality managementB) Portfolio diversificationC) Geographic diversificationD) Deposit insuranceE)

32、All of the above.Answer: E63. Measured by dollar volume the largest category of capital at . banks is:A) Par value of common stockB) Subordinated notes and debenturesC) SurplusD) Undivided profits and capital reservesE) None of the above.Answer: C64. The fundamental purposes of regulating bank capit

33、alcited in the textbook includewhich of the following?A) To limit the risk of bank failures.B) To preserve public confidence in banks.C) To limit losses to the federal government arising from insurance claims.D) All of the above.E) A and B only.Answer: D65. The Internal Capital Growth Rate for a ban

34、k is a function of which of the following factors?A) Profit margin.B) Asset utilization.C) Equity multiplier.D) Earnings retention ratio.E) All of the above. Answer: E66. Second National Bank is forecasting a return on equity of 15 percent for this year. The board of directors wants to maintain its

35、current policy of paying the banks stockholders 40 percent of any net earnings the bank will earn. How fast can the banks assets grow this year without jeopardizing its ratio of capital to assets?A) 15 percent.B) 9 percent.C) 8 percent.D) 6 percent.E) None of the above Answer: B67. Possible breakdow

36、ns in quality control, inefficienciesin producing and deliveringfinancial services,weather damage, aging or faultycomputer systems and simpleerrors in judgment by bank managementillustrate what form of risk faced by banks?A) Credit riskB) Liquidity riskC) Interest-rate riskD) Operational riskE) None

37、 of the above Answer: D68. The ratio of core capital to average assets is called the:A) Supplemental Capital ratioB) Leverage ratioC) Long-term capital ratioD) GAAP capital ratioE) None of the above. Answer: B69. The risk that a customer the bank has entered into a contract with will fail to pay or

38、to perform, forcing the bank to find a replacement contract that may be less satisfactory is what form of risk listed below?A) Counterparty riskB) Interest-rate riskC) Operating riskD) Credit riskE) Liquidity riskAnswer: A70. If a bank benefits when a foreign currency declines in value, then the ban

39、k must be in a position. The term below that correctly fills in the blankin the preceding sentence is:A) LongB) ShortC) NegativeD) Credit riskE) None of the aboveAnswer: B71. In the United States a well capitalized bank must have a ratio of capital to risk-weighted assets of at least:A) 6 percentB)

40、8 percentC) 10 percent.D) 5 percent.E) None of the aboveAnswer: C72. In the United States a bank to be considered adequately capitalized must have a ratio of Tier 1 (or core) capital to risk-weighted assets of at least:A) 8 percentB) 6 percentC) 10 percentD) 4 percentE) None of the aboveAnswer: D73.

41、 A well capitalized bank in the United States must have a leverage ratio of at least:A) 5 percentB) 4 percentC) 6 percentD) 8 percentE) None of the aboveAnswer: B74. A bank has $100 million in assets in the 0 percent risk weight category, $200 millionin assets in the 20 percent risk weight category,

42、 $500 million in assets in the50 percent risk weight category and $750 million in assets in the 100 percent risk weight category This bank has $57 million in core (Tier 1) capital What is this banks ratio of Tier 1 capital to risk-weighted assets?A) percentB) percentC) percentD) percentE) None of th

43、e aboveAnswer: D75 A bank has a profit margin of 5 percent, an asset utilization ratio of 11 percent an equity multiplier of 12 and a retention ratio of 60 percent What is this banks ICGR?A) percentB) percentC) percentD) 33 percentE) None of the aboveAnswer: B76 Which of the following would be an ex

44、ample of Tier 1 capital?A) Subordinated debt capital instruments with an original maturity of at least 5 yearsB) Allowance for loan and lease lossesC) Minority interest in the equity accounts of consolidated subsidiariesD) Intermediate term preferred stockE) All of the aboveAnswer: C77 Which of the

45、following would be an example of Tier 2 capital?A) Subordinated debt capital instruments with an original maturity of at least 5 yearsB) Undivided profitsC) Minority interest in the equity accounts of consolidated subsidiariesD) Qualifying noncumulative preferred stockE) All of the aboveAnswer: A78

46、Which of the following would be an example of crime risk?A) A bank manager that embezzles $1,000,000 from the bankB) A bank that loses $500,000 from trading in foreign currenciesC) A $1,000,000 loan to a business on which no interest and principal has been collected in 2 yearsD) A bank manager predi

47、cts that interest rates will rise. However interest rates fall causing the bank s net income to fall by $250,000E) All of the above are examples of crime riskAnswer: A79. Which of the following assets fits into the 0 percent risk weight category?A) CashB) Deposits at the Federal ReserveC) Treasury B

48、illsD) GNMA mortgage-backed securitiesE) All of the above fit into the 0 percent risk weight category Answer: E80. A bank that is well-capitalized:A) Faces no significant regulatory restrictionsB) Cannot accept broker placed deposits without regulatory approvalC) Has limits on dividends and manageme

49、nt fees it is allowed to pay and limits on the maximum asset growth rate among other restrictionsD) Will be placed into conservatorship or receivership if it its capital level is not increased within a certain time limit.E) None of the aboveAnswer: A81. A bank that is critically undercapitalized:A)

50、Faces no significant regulatory restrictionsB) Cannot accept broker-placed deposits without regulatory approvalC) Has limits on dividends and management fees it is allowed to pay and limits on the maximum asset growth rate among other restrictionsD) Will be placed into conservatorship or receivershi

51、p if it its capital level is not increased within a certain time limit.E) None of the aboveAnswer: D82. A bank that is adequately capitalized:A) Faces no significant regulatory restrictionsB) Cannot accept broker-placed deposits without regulatory approvalC) Has limits on dividends and management fe

52、es it is allowed to pay and limits on the maximum asset growth rate among other restrictionsD) Will be placed into conservatorship or receivership if it its capital level isnot increased within a certain time limit.E) None of the aboveAnswer: B83. Which of the following is in the 100 percent risk-we

53、ight category?A) CashB) General obligation municipal bondsC) Residential mortgage loansD) Credit card loansE) None of the aboveAnswer: D84. Which of the following is in the 50 percent risk-weight (moderate) category?A) CashB) General Obligation Municipal BondsC) Residential Mortgage LoansD) Credit C

54、ard LoansE) None of the aboveAnswer: C85. Which of the following is in the 20 percent risk-weight (low) category?A) CashB) General obligation municipal bondsC) Residential mortgage loansD) Credit card loansE) None of the aboveAnswer: B86. A bank has a ROE of 14 percent and a ROA of 2 percent. What i

55、s this banks equity capital to total assets ratio?A) percentB) percentC) percentD) 16 percentE) None of the aboveAnswer: B87. A bank has $200 million in assets in the 0 percent risk-weight category. It has$400 million in assets in the 20 percent risk-weightcategory. It has $1000 millionin assets in

56、the 50 percent risk-weight category and has $1000 million in assetsin the 100 percent risk-weight category. This bank has $96 million in Tier 1 capital and $48 million in Tier 2 capital. What is this banks ratio of Tier 1 capital to risk assets?A) percentB) percentC) percentD) percentE) None of the

57、aboveAnswer: A88. A bank has $200 million in assets in the 0 percent risk-weight category. It has$400 million in assets in the 20 percent risk-weightcategory. It has $1000 millionin assets in the 50 percent risk-weight category and has $1000 million in assetsin the 100 percent risk-weight category. This bank has $96 million in Tier 1 capital and $48 million in Tier 2 capital. What is this banks ratio of Tier 2 capital to risk asset