1: Which of the following statements about private banking is true? 

Private banking focuses on financial transactions that help clients access different markets.

Private banking refers to banking services provided to small businesses which is owner-operated and have very simple banking needs.

Private banking provides products and services such as chequing/checking and savings accounts and personal loans to all individual consumers.

Private banking is often provided on a personal basis through a dedicated relationship manager.

2: Mr. Sampson has $2 million in cash sitting in an operating account and is looking to invest in the stock market and earn profits on a portfolio of equities. He is most likely to seek what service?

Retail banking

Commercial banking

Investment banking

Private banking

4: Technology Inc. is a software company based in the United States, with over 600 employees in 10 locations across the country. The company has recently signed a EUR 2 million contract with a European supplier and is looking for foreign exchange service to help facilitate the transaction. This is an example of services which would be provided in:

Commercial Banking

Retail Banking

Corporate Banking

Business Banking

5: Which of the following is NOT a typical product or service offered in retail banking?

Personal loans

Mortgages

Debit and credit cards

Tax advisory service

8: Which of the following statements about asset-liability matching (ALM) is NOT true?

Proper ALM minimizes the interest rate risk and liquidity risk within a bank.

In ALM, treasury managers need to project the timing of cash outflows and make sure there is sufficient income to meet any cash needs.

ALM is the practice of ensuring there are equal amounts of assets and liabilities on a bank's balance sheet.

ALM requires investing, buying, selling, and allocating a bank's assets to cover its liabilities when needed.

9:Which of the following are the two steps in the securitization process?

The bank combines multiple assets into a single compound asset and determines the return by taking the weighted average of the return offered by each individual asset; (2) the compound asset is sold as securities to third party investors.

The bank sells its liquid assets to third party investors in exchange for cash and invests the cash for a return; (2) in one year's time, the bank earns a return on the invested cash and purchases back the assets.

The bank purchases assets from third parties with an agreement that the sellers will buy back the assets at expiration date; (2) the bank sells the assets back to the original sellers at the agreed price at expiration.

The bank sells multiple individual assets at their respective returns as a bundle to third party investors; (2) the investors bundle these assets into a single compound asset and resell it to other market buyers.

Answer rating: 100% (QA)

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