Topic 1 DQ 1 ENT

hich one is not an incentive for a bank to Securitize its mortgage loans? A) Reduce insurance premium paid to FDIC B Meet the regulations on equity capital adequacy Increase the duration of the bank's asset portfolio D Reduce the bank's illiquidity exposure

Which one is not an incentive for a bank to securitize its mortgage loans? Reduce insurance premium paid to FDIC Meet the regulations on equity capital adequacy Increase the duration of the bank's asset portfolio Reduce the bank's illiquidity exposure hich one is not an incentive for a bank to Securitize its mortgage loans? A Reduce insurance premium paid to FDIC B Meet the regulations on equity capital adequacy Increase the duration of the bank's asset portfolio Reduce the bank's illiquidity exposure

15. In making loans to a single customer, commercial banks are not restricted to a maximum percentage of their capital, i.e. there is not a limit on how a bank to lend to a single customer. a. True b. False 16. The opening of a commercial bank in the United States a. requires a charter from the city in which they plan to operate requires a charter from a state or the federal government. b. c. None of these is correct d. always requires a charter from the federal government. 17. Current bank regulations: a. set requirements for the maximum amount of equity that banks can hold. b. None of the other answers are correct. c. impose standards for how liquid the bank is. d. involve a trade-off between the safety of the bank and the efficiency of bank operations. 18. The Basel framework recommends that banks maintain capital in proportion to their: a. None of the other answers is correct. b. total assets c. risk-weighted liabilities d. risk-weighted assets 19. The potential risk that financial…

Question 2 Explain the following different types of credit advances and when firms use it. (i) Bank overdraft (ii) Syndicated loan (iii) Factoring b) Discuss the advantages and disadvantages of factoring service to businesses?

A bank is considering implementing a business rules management system for assessing the riskand creditworthiness of individuals as part of the loan approval process.• List and explain 3 benefits of such a system?• List 2 potential legal or ethical issues that might arise in the use of such a system

please help with this question

QUESTION 9 The interest rate charged on secured short-term loans to a corporation is generally higher than that charged on unsecured short-term loans because ... the risk of default is lower on secured loans. secured loans are less risky than unsecured loans. it is costly to negotiate and administer secured loans. lenders of secured loans must pay more for their funds.

Item 33 of 50 The principal advantage of using commercial paper as a short-term financing instrument is that it Select the correct response: Offers security, i.e., collateral, to the lender. Can be purchased without commission costs. Is readily available to almost all companies. Is usually cheaper than a commercial bank loan.

Question one: True or False (Correct the wrong answer)1) Deposits are considered as assets in the bank’s balance sheet2) Credit risk in banks could occur duo to Inadequate income of lenders3) Interest rate on cash credit is higher than interest rate on bank overdraft4) Trading securities is one of the agency functions offered by commercial banks5) Banks accept deposits in order to lend money to the borrowers6) When banks accept deposits, it basically means they are lending money to the depositors7) Cash and treasury management are services provided by commercial banks8) Online banks could face risks linked to rapid technological changes9) Bank regulation’s only objective is to protect the consumer10) International banks have higher transaction costs than regular banks11) Large commercial banks focus on earning fee income on nontraditional activities12) Deposits are considered as liabilities in the bank’s balance sheet13) Banks underwriting loans with the expectation that another party…

H1.

QUESTION 1 Which if the following is not true of the 5Cs in evaluating credit quality     Character refers to the integrity and honesty of the borrower and applies to both individuals and companies     Capital refers to the savings or wealth of the borrower as an additional source of income to repay the loan     Collateral refers to assets that are pledged to lender     Capacity refer to external factors including the state of economy  that can impact the borrower’s source of income.     QUESTION 2 Which of the following is not true?                                   Firm A                                      Firm B                          Industry Benchmark   2018 2019 2020 2018 2019 2020 2018 2019 2020 ROA 9.14% 9.50% 9.90% 8.11% 8.16% 8.19% 8.11% 8.14% 8.15% ROE 22.45% 22.95% 23.45% 19.65% 19.88% 20.12% 19.95% 20.55% 21.00% TIE 1.75 1.65 1.55 2.75 2.90 3.05 2.25 2.30 2.50 CR 3.25 3.66 3.75 2.55 2.65 2.75 2.40 1.45 2.50 EPS…

1b) Banks offer overdraft facilities and term loans, among other services, to their corporate clients. Explain the nature and use of overdrafts and term loans and give examples where a companymight wish to use overdraft or a term loan.