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1、Chapter 5Multiple Choice Questions1.The noncash expense item on a banks Report of Income designed to shelter a banks current earnings from taxes and to help prepare for bad loans is called: DA)Short-term debt interest B)Noninterest expense C)Provision for taxes D)Provision for possible loan losses E
2、)None of the above. 2Banks depend heavily upon borrowed funds supplied by customers with little owners capital invested. This means that banks make heavy use of: AA)Financial leverage B)Capital restructuring C)Operating Leverage D)Margin borrowing E)None of the above. 3.Large U.S. banks must use whi
3、ch of the methods listed below to determine their provision for loan loss expense? CA)Experience method B)Reserve method C)Specific charge-off method D)Historical cost method E)None of the above. 4.A banks temporary lending of excess reserves to other banks is labeled on the balance sheet as: BA)Fed
4、 Funds Purchased B)Fed Funds Sold C)Money Market Deposits D)Securities Purchased for Resale E)None of the above 5.A bank sells shares of its common stock with a par value of $100 for $200 in the market. Which two accounts on the banks balance sheet are going to be affected? D A)Retained earnings and
5、 capital surplus accounts B)Subordinated notes and debentures and commons stock outstanding accounts C)Retained earnings and common stock outstanding accounts D)Common stock outstanding and capital surplus accounts E)Only the common stock outstanding account is affected 6.A bank which starts with AL
6、L of $1.48 million at the beginning of the year, charges off worthless loans of $.94 million during the year, recovers $.12 million on loans previously charged off and charges current income for a $1.02 million provision for loan losses will have an ALL at the end of the year of: BA)$.66 million B)$
7、3.32 million C)$1.68 million D)$1.28 million E)The same amount as at the beginning of the year 7.A bank that has total interest income of $67 million and total noninterest income of $14. million. This bank has total interest expenses of $35 million and total noninterest expenses (excluding PLL) of $
8、28 million. Its provision for loan losses is $6 million and its taxes are $5. What is this banks net income? AA)$7 B)-$14 C)$18 D)$32 E)None of the above 8. You know the following information about the Miller State BankGross Loans$300Miscellaneous Assets$50Deposits$390Total Equity$50Common Stock Par
9、$5NonDeposit Borrowings$60Investment Securities$150Net Premises$40Surplus$5Allowance for Loan Losses$50Deposits$390Total Assets$500Gross Premises $70Given this information, what is this firms Net Loans?AA) $250B) $350C) $500D) $50E) $1509. You know the following information about the Davis National
10、BankTotal Interest Expenses($500)Total Non Interest Income $100Securities Gains (Losses) $ 50Income Taxes($ 80)Dividends to Stockholders($ 40)Total Interest Income $800Total Non Interest Expenses($150)Provision for Loan Losses($100)Given this information, what is this firms Net Income? DA) $300B) $1
11、50C) ($50)D) $120E) $8010. You know the following information about the Webb State BankAccumulated Depreciation$40Net Loans$600Fed Funds Purchased and Repurchase Agreements$200Cash and Due from Banks$50Trading Account Securities$40Miscellaneous Assets$100Deposits$500Undivided Profits$140Gross Premis
12、es$90Surplus$40Subordinated Debt$100Investment Securities$160Common Stock Par$20Gross Loans$700Given this information, what is this firms Total Assets? AA) $1000B) $300C) $800D) $200E) $500Problems5-4If you know the following figures:Gross Loans300Trading Account Securities2Allowance for Loan Losses
13、15Other Real Estate Owned4Federal Funds Sold26Goodwill and other Intangibles3Common Stock12Total Liabilities380Surplus19Preferred Stock3Total Equity Capital49Nondeposit Borrowings20Cash and Due from Banks9Bank Premises and Equipment, Net29Miscellaneous Assets38Bank Premises and Equipment, Gross34Ple
14、ase calculate these items:Total AssetsNet LoansUndivided ProfitInvestment SecuritiesDepreciationTotal Deposits5-5. Hokie High Bank has Gross Loans of $550 million with an ALL account of $30 million. Two years ago the bank made a loan for $10 million to finance the Hokie Hotel. One million dollars in principal was repaid before the borrowers defaulted on the loan. The Loan Committee at Hokie High Bank believes the hotel will sell at auction for $7 mi
