Managing Liability and Liquidity Risk

Question 1

The risk management function of the Good Neighbor Bank will be constantly looking at _____. (Select all that apply.)

Revolt · Accepted Answer

identifying risk; offsetting the negative consequences of risks; measuring risk

Question 2

Sunshine Bank is a small bank that is being sued by a customer because the bank foreclosed on her home. She feels that more generous terms could have been worked out, especially since she has been out of work. It sounds as though the bank will have to worry now about _____. (Select all that apply.)

Revolt · Accepted Answer

legal risk; reputation risk

Question 3

Doing business with an international bank from a country that is a part of the International Monetary Fund is less of a risk than a bank from a country that is not part of the fund.

Revolt · Accepted Answer

True

Question 4

Bank A is assessing whether they have enough cash to pay all of their obligations on time. This bank is assessing their _____.

Revolt · Accepted Answer

liquidity risk

Question 5

To calculate a bank’s short term liquidity, _____.

Revolt · Accepted Answer

divide short term liabilities into total cash or near cash assets

Question 6

Two key international organizations/positions with an impact on banking regulations are _____. (Select all that apply.)

Revolt · Accepted Answer

International Monetary Fund; Basel III banking norms

Question 7

When evaluating a bank, analysts are most interested in determining the bank’s solvency.

Revolt · Accepted Answer

True

Question 8

A bank’s liquidity ratio looks at _____. (Select all that apply.)

Revolt · Accepted Answer

total liquid assets of the bank; total obligations to account holders

Question 9

A bank has a LCR of 27 percent. As compared to other banks, this bank is _____.

Revolt · Accepted Answer

well below the average

Managing Liability and Liquidity Risk Answers

More from this Course

TRY EDGENUITY HACKS