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- 1. Rank the following types of bank liabilities, first according to their level of liquidity risk, and then according to their interest rate risk. Then rank them according to their current cost to the bank. Explain why the rankings vary. DDAs Interest-checking accounts MMDAs Small-time deposits Jumbo CDs Federal funds purchased Eurodollar liabilities Federal Home Loan Bank advancesWhat are some of the ways that banks can borrow short-term funds when they need "liquidity"?(Select all that apply; three of the answers below are correct.) Reference: Chapters 11 & 12 They can borrow directly from the Securities & Exchange Commission through the "regulatory" market. They can borrow from the Department of Treasury through the "Treasury" window. They can borrow another bank's reserves through the "fed funds" market. The can engage in a "sale & repurchase agreement" (or "repo") by selling some of their securities to another financial insitution and promising to buy them back the next day. They can borrow directly from the Federal Reserve through the "discount window".Explain the functions of the Federal Reserve Banking system. Of the functions which is the most critical? Which is the least critical? Explain why.
- A bank's required reserve ratio is equal to: Checkable Deposits/Required Reserves Net Worth/Assets Loans/Checkable Deposits Required Reserves/Checkable Deposits give answer with explanationWhich of the following functions of the Commercial Bank's primary functions is influence by the Reserve Requirement Ratio (RRR) directed by the Central Bank? a. Creation of Credit O b. Clearing of Cheques O c. Remittance of Funds O d. Financing of Internal and Foreign TradeIf a bank credit card customer repays the full balance on their credit card, and the bank immediately puts the proceeds into Federal Reserve deposits, then Risk-weighted assets increase Risk-weighted assets decrease Risk-weighted assets stay the same
- Critically discuss the effect of deposit insurance on bank stability.Which of the following assets would be considered least liquid? Group of answer choices A savings account A checking account An interest-paying checking account A money market mutual fund Series EE US savings bondsWhich of the items below are typically ASSETS for a commercial bank?(Select all that apply; three of the answers below are correct) reference: chapters 11 & 12 Customer Deposits (such as checking & savings accounts) Investment Securities (such as treasury bonds & money market securities) Vault Cash & Deposits at the Federal Reserve Customer Loans (such as mortgages or small business loans) Borrowed Funds (such as short-term borrowing from other banks, or from the Federal Reserve)
- Choose the correct answer: 5. Which of the following is considered effective? a. Certificates of Deposit b. Money Market Checking Accounts c. Money Market Savings Certificates d. Future-dated checksLiabilities of saving institutions include: checkable deposits, NOW accounts, and regular savings accounts borrowed funds savings certificates and negotiable certificates of deposit money market deposit accounts demand deposits to commercial customers non-interestbearing checkable accounts All of the aboveWhat is National Savings Certificate? A. Short-term U.S. government debt obligation B. A fixed - income investment scheme C. A financial product commonly sold by banks, thrift institutions, and credit unions D. An unsecured money market instrument