Which of the following is not considered a cash asset?
Marketable securities
Which of the following is not a reason that banks hold cash assets?
To meet capital requirements
Which of the following is not considered a viable long term source of bank liquidity?
Cash
In which of the following ways can a bank acquire liquidity?
Selling Treasury secuities
Which of the following is not an advantage of larger cash balances for a bank?
Larger cash balances reduce a bank's interest expense
Which of the following is not considered a monetary policy tool of the federal reserve>
Changing float requirements
The Federal Reserve has reduced the use of reserve requirements as a monetary policy tool because:
The fed has focused on controlling short term interest rates
of the increased use of sweep accounts
reserve requirements are a tax on banks
all of the above
All of the above
Which of the following does not directly influence the amount of required reserve a bank must hold?
The dollar amount of money market deposit accounts outstanding
In determining reserves, the banks and the Federal Reserve currently use:
a lagging reserve accounting system
The two week period during which a bank must hold sufficient legal reserves is called the :
maintenance period
A bank is currently exactly meeting its reserve requirements of 10%. If the bank has a deposit inflow of $10,000,000 what is the impact on its required reserve position?
It is now deficient $1,000,000 in required reserves
10m * .1 = 1,000,000
The check clearing services of correspondent banks are often used because:
It often reduces float
Which of the following is a discretionary factor that will increase a bank's daily reserves held at the Federal Reserve?
Federal Funds purchased
Which of the following is a discretionary factor that will decrease a bank's daily reserves held at the Federal Reserve?
Currency received from the Federal Reserve
Which of the following is a non discretionary factor that will increase a bank's daily reserves held at the Federal Reserve?
Deposits from the US Treasury
Which of the following is a non discretionary factor that will decrease a bank's daily reserves held at the Federal Reserve?
Remittances charged
Which of the following indicates the potential demand for new loans?
Large, unused commercial credit lines outstanding
Which of the following indicates the potential for deposits leaving a bank?
Large deposits held by a single customer
Which of the following is not considered a highly liquid asset?
Repurchase agreement
Which of the following is not a measure of liability liquidity?
Total loans to total assets
When selling securities to meet liquidity needs, a bank should consider all of the following except:
A bank should consider all of the above when selling securities to meet liquidity needs
When increasing liabilities to meet liquidity needs, a bank should consider all of the following except:
Brokerage fees
required reserves
FDIC insurance premiums
loss interest income
a bank should consider all of the above when increasing liabilities to m
a bank should consider all of the above when increasing liabilities to meet liquidity needs
Volatile deposits:
equal the difference between actual current deposits and the base estimate of core deposits
The ease of converting as asset cash with a minimum of loss is known as:
asset liquidity
Correspondent banking services would include which of the following?
all of the above
There is a short-run trade-off between a bank's liquidity and ____.
profitability
Which of the following could be used to identify a potential increase in borrowing by customers that might deplete a bank's cash reserves?
Unused commercial credit lines outstanding
Collateral is required against each of the following liabilities except:
US Treasury securities
Which of the following is not a measure of liability liquidity?
Federal funds sold to total assets
The section of a contingency plan that assesses the impact of potential adverse events on the bank's balance sheet is known as the _____ section?
quantitative
Vault cash generally satisfies a bank's liquidity needs.
False
Respondent banks buy services from correspondent banks.
True
More liquid assets tend to earn lower returns, everything else the same.
True
Core deposits tend to be more interest elastic than volatile liabilities.
False
The best measure of bank asset liquidity is the core deposits to total asset ratio.
Falso