This question involves distinguishing small/medium banks from very large banks. For the following ratio descriptions, indicate whether they generally refer to a small/medium bank or to a very large bank by Highlighting the correct option. Provide a rationale for your choice.

a) Relatively high purchased liquidity to assets:

small/medium bank very large bank

Rationale:

b) Relatively high non-interest expense to income ratio:

small/medium bank very large bank

Rationale:

2.

In an interest rate swap agreement cash flows occur

Select one:

a.

on regular intervals: each party makes a full payment of monies owing

b

on regular intervals: the party owing the largest amount pays the difference between payments due

c.

each day: the amount owing is calculated and transferred to each party.

d.

once, at the end of the swap term