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Nonbank financial institutions do not earn the interest on reserves (IOR) rate. a. True b. False
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- A bank has a positive repricing gap. This implies that a. some RSAs are financed by fixed-rate liabilities. b. some RSLs are financing fixed-rate assets. c. some RSAs are financing equity. d. the bank has no fixed-rate assets.A bank's net interest margin represents the proportion of its investments that are financed with borrowed funds. Group of answer choices: True FalseWhich one of the following is not a money market instrument? A. Treasury bill B. Negotiable certificate of deposit C. Commercial paper D. Treasury bond E. Eurodollar account Please explain all points without plagiarism Upvote ?sure
- Which of the following actions cannot be used by banks to increase reserves? A. Sell Treasury bonds B. Sell loans C. Buy Treasury bonds D. Call loansWhich of the following is not a Money Market Instrument? a. Commercial Paper b. Debentures c. Treasury Bill d. Certificate of DepositWhat is not an advantage of a Treasury (T) Note? Select one: a. Extremely liquid security. b. Loss of potential purchasing power (inflation > yield). c. An investor’s capital is secure. d. Better returns than a bank savings account.
- Which of the following has caused banks difficulty in estimating liquidity needs?A. competition for loans from other financial institutionsB. deregulation of interest rate ceilings on depositsC. competition for loans from nonfinancial institutionsD. a, b, and cA trade finance instrument not supported by bank guarantee is called O a. Irrevocable LC O b. Revocable LC O c. Forfaiting O d. Open accountIf a bank has a positive repricing gap (RSAs > RSLs), then: Does this bank have reinvestment or refinancing risk? If interest rates increase, net interest income will: A. Reinvestment risk, increase B. Reinvestment risk, decrease C. Refinancing risk, increase D. Refinancing risk, decrease
- Which of the following is not a Money Market Instruments? a. Corporate Bonds b. Bankers’ Acceptance c. Bills of Exchange d. Treasury BillsBanks use gap analysis to measure interest rate risk in their balance sheets. If firm XYZ is said to have a positive gap, this means: Group of answer choices C. Rate-sensitive assets exceed rate-sensitive liabilities B. Long-term assets are funded with short-term liabilities D. Rate-sensitive assets equal rate-sensitive liabilities A. Liabilities reprice before assetsWhich of the following is not true with Money Market? Select one: a. Deals in short term funds b. None of the options c. Provides funds for fixed capital d. Provides link between depositors and borrowers