Answer the following multiple-choice questions related to bank financial reporting:
Required
a. All but which of the following would be a representative asset of a bank?
1. Investment securities
2. Loans
3. Equipment
4. Cash on hand
5. Savings accounts
b. All but which of the following would be considered an earning asset of a bank for the earning assets to total assets ratio?
1. Loans
2. Leases
3. Cash
4. Investment securities
5. Money market assets
c. The ratio for a bank that provides an indication of management’s ability to control the spread between interest income and interest expense is the
1. Loan loss coverage ratio.
2. Earning assets to total assets.
3. Return on earning assets.
4. Interest margin to average total assets.
5. Equity capital to total assets.
d. All but which of the following would be a representative liability of a bank?
1. Savings
2. Demand deposits
3. Cash on hand
4. Long-term debt
5. Time deposits
e. Typically, the largest expense for a bank will be
1. Employer benefits.
2. Occupancy expense.
3. Salaries.
4. Provision for loan losses.
5. Interest expense.
f. The ratio that indicates the extent of equity ownership in a bank is the
1. Interest margin to average total assets.
2. Loss coverage ratio.
3. Loans to deposits.
4. Equity capital to total assets.
5. Deposits times capital.