Commerical Banking Exam #2

What is a first time security offering called?

Initial Public Offering (IPO)

What does the underwriting process for a security involved?

What is it called when an investment firm commits its own funds to take a risk position in an underlying security called?

Under FASB 157, what # Level assets valuations are based on observable market prices for the identical instrument?

Know what the Dodd-Frank Volker Rule did.

Who charters BMW Bank

Does an investment bank acting as a broker, take ownership of the underlying security?

What is Mutual of Omaha’s business model?

Does BMW Bank have more leverage than it’s peers?

Who owns BMW Financial Services

When is interest rate risk the greatest for a bank?

How can interest rate risk be measured?

Understand what amount of a loan, payable in a given installment timeframe, would be considered rate sensitive?

Understand the effects of a positive GAP, (see chart in slide set)

What would cause an asset to be classified as rate sensitive?

What is likely to occur when rates rise sharply?

Be able to define how interest rate risk can arise for a bank

What does Static GAP analysis mainly focus on?

How is GAP definied?

Is there a relationship between a bank’s portfolio mix and net interest income?

What part is sensitive if there is a negative GAP?

Are non-earning assets classified as rate- sensitive for GAP purposes?

What does Static GAP analysis focus on?

What do liability management decisions usually determine?

What kind of funding includes transaction accounts, MMDA’s savings accounts and small time deposits?

What affects Core Deposits?

What are non-interest checking accounts called?

What are large time deposits generally called?

What do overdraft fees represent for a bank?

What are the benefits of a ROTH IRA?

What traits fo Federal Home Loan Bank advances usually carry?

Who are more interest rate sensitive, individuals or wholesale customers?

What is an ACH transaction?

Today, who owns most demand deposit accounts?

Do repurchase rates usually carry a lower interest rate than Fed funds?

When interest rates rise, do average historical costs overstate the actual marginal costs issuing new debt?

What is NOT considered a cash asset?

What are reasons that banks hold cash assets?

What, when given a set of examples, is NOT considered a monetary policy tool of the Federal Reserve?

Understand the purpose of sweep accounts

How do banks and the Federal Reserve determine reserve amounts?

Why do “respondent banks” use the check-clearing services of correspondent banks?

What is an indicator of potential demand for new loans?

What is an indicator for potential deposits leaving a bank?

What are measures of liability liquidty?

There is often a trade-off between a banks liquidity and what?

Does vault cash satisfy a banks liquidity needs?

Do respondent banks buy services from correspondent banks?

Are core deposits more interest elastic than volatile liabilities?

What is the best measure of a bank’s asset liquidity?