Chapter 4 page 97 Question: 5 10. What is the Beige book and why is it important to the FOMC? ANSWER: Chapter 17 page 500 Questions: 2, 10 11. What are four major sources of funds for banks? What alternatives does a bank have if it needs temporary funds? What is the most common reason that banks issue bonds? ANSWER 12. Why do banks invest in securities, even though loans typically generate a higher retur? How does a bank decide the appropriate percentage of funds that should be allocated to each type of asset? Explain. ANSWER: Chapter 19 page 521-522_ Questions: 1,3,4,6 13. What is accomplished when a bank integrates its liability management with its asset management? ANSWER: 14 How do banks resolve illiquidity problems? ANSWER: 15. If a bank expects interest rates to decrease over time, how might it alter the rate sensitivity of its assets and liabilities? ANSWER: 16. If a bank is very uncertain about future interest rates, how might it insulate its future performance from future interest rate movements? ANSWER: Chapter 19 page 559 Problems: 1, 2, 3 17. Net Interest Margin. Suppose a bank eam's $201 million in interest revenue but pays $156 million in interest expense. It also has $800 million in earning assets. What is its not interest margin