商业银行管理 ROSE 7e 课后答案chapter05Word文档格式.docx

1、Components of the Income Statement: Revenues and ExpensesChapter OutlineI. Introduction: The Statements We Will Review in This ChapterII. An Overview of Balance Sheets and Income StatementsIII. The Banks Balance Sheet （Report of Condition）A. The Principal Types of Accounts on a Banks Report of Condi

2、tionB. Bank Assets1. Cash and Due from Depository Institutions2. Securities: The Liquid Portion3. Investment Securities: The Income-Generating Portion4. Trading Account Assets5. Federal Funds Sold and Securities Purchased under Resale Agreements6. Loans and Leases 7. Loan Losses8. Specific and Gener

3、al Reserves 9. International Loan Reserves10. Unearned Discount Income11. Nonperforming （noncurrent） Loans12. Bank Premises and Fixed Assets13. Other Real Estate Owned （OREO）14. Goodwill and Other Intangible Assets15. All Other Assets C. Bank Liabilities1. Deposits2. Borrowings from Nondeposit Sourc

4、es3. Equity Capital Accountsa. Preferred Stockb. Common EquityD. Comparative Balance-Sheet Ratios for Different Size BanksE. Recent Expansion of Off-Balance-Sheet Items in BankingF. The Problem of Book-Value Accounting in BankingG. Auditing: Assuring Reliability of Financial StatementsIV. Components

5、 of the Income Statement （Report of Income）A. Financial Flows and Stocks1. Interest Income2. Interest Expenses3. Net Interest Income4. Loan-Loss Expense5. Noninterest Income6. Noninterest Expenses7. Net Operating Income and Net IncomeB. Comparative Income-Statement Ratios for Different-Size BanksV.

6、The Financial Statements of Leading Nonbank Financial Firms: A Comparison to Bank StatementsVI. An Overview of Key features of Financial Statements and Their ConsequencesVII. Summary of the ChapterConcept Checks5-1. What are the principal accounts that appear on a banks balance sheet （or Report of C

7、ondition）?The principal asset items on a banks Report of Condition are loans, investments in marketable securities, cash, and miscellaneous assets. The principal liability items are deposits and nondeposit borrowings in the money market. Equity capital supplied by the stockholders rounds out the tot

8、al sources of funds for a bank.5-2. Which accounts are most important and least important on the asset side of a banks balance sheet?The rank order of assets by dollar volume appearing on U.S. bank balance sheets are as follows:Rank Order Assets 1 Loans 2 Investment Securities 3 Cash 4 Miscellaneous

9、 Assets5-3. What accounts are most important on the liability side of a balance sheet? The principal bank liability items from most important to least important are:Rank Order Liabilities and Equity Capital 1 Deposits 2 Nondeposit Borrowings 3 Equity Capital 4 Miscellaneous Liabilities5-4. What are

10、the essential differences between demand deposits, savings deposits, and time deposits?Demand deposits are regular checking accounts against which a customer can write checks or make any number of personal withdrawals. Regular checking accounts do not bear interest under current U.S. law and regulat

11、ion. Savings deposits bear interest （normally, they carry the lowest rate paid on bank deposits） but may be withdrawn at will （though a bank usually will reserve the right to require advance notice of a planned withdrawal）. Time deposits carry a fixed maturity and the bank may impose a penalty if th

12、e customer withdraws funds before the maturity date is reached. The interest rate posted on time deposits is negotiated between the bank and its deposit customer and may be either fixed or floating. A NOW account combines features of a savings account and a checking account, while a money market dep

13、osit account encompasses transactional powers similar to a regular checking account （though usually with limitations on the number of checks or drafts that may be written against the account） but also resembles a time deposit with an interest rate fixed for a brief period （such as weekly） but then b

14、ecomes changeable over longer periods to reflect current market conditions.5-5. What are primary and secondary reserves and what are they supposed to do?Primary reserves consist of cash, including a banks vault cash and checkable deposits held with other banks or any other funds such as reserves wit

15、h the Federal Reserve that are accessible immediately to meet demands for liquidity made against the bank. Secondary reserves consist of assets that pay some interest （though usually pay returns that are much lower than earned on other assets, such as loans） but their principal feature is ready mark

16、etability. Most Secondary reserves are marketable securities such as short term government securities and private securities such as commercial paper. Both primary and secondary reserves are held to keep the bank in readiness to meet demands for cash （liquidity） from whatever source those demands ma

17、y arise.5-6. Suppose that a bank holds cash in its vault of $1.4 million, short-term government securities of $12.4 million, privately issued money market instruments of $5.2 million, deposits at the Federal Reserve banks of $20.1 million, cash items in the process of collection of $0.6 million, and

18、 deposits placed with other banks of $16.4 million. How much in primary reserves does this bank hold? In secondary reserves?The bank holds primary reserves of:Vault Cash + Deposits at the Fed + Cash Items in Collection + Deposits With Other Banks= $1.4 mill. + $20.1 mill. + $0.6 mill. + $16.4 mill.=

19、 $38.5 millionThe bank has secondary reserves of:Short-term Government Securities + Private Money-Market Instruments= $12.4 mill. + $5.2 mill.= $17.6 million5-7. What are off-balance-sheet items and why are they important to some financial firms?Off-balance-sheet items are usually transactions that

20、generate fee income for a bank （such as standby credit guarantees） or help hedge against risk （such as financial futures contracts）. They are important as a supplement to income from loans and to help a bank reduce its exposure to interest-rate and other types of risk.5-8. Why are bank accounting pr

21、actices under attack right now? In what ways could financial institutions improve their accounting methods?The traditional practice of banks has been to record the value of assets and liabilities at their value on the day the accounts were originally created and not change those values over the life

22、 of the account. The SEC and FASB started questioning this practice in the 1980s because they were concerned that investors I n bank securities would be misled about the true value of the bank. Using this historical value accounting method may in fact conceal a bank that insolvent in a current marke

23、t value sense. The biggest controversy centered on the banks investment portfolio which would appear to be easy to value at its current market price. At a minimum, banks could help themselves by marking their investment portfolio to market. This would give investors an indication of the true value o

24、f the banks investment portfolio. Banks could also consider using the lower of historical or market value for other accounts on the balance sheet.5-9. What accounts make up the Report of Income （income statement） of a bank?The Report of Income includes all sources of bank revenue （loan income, inves

25、tment security income, revenue from deposit service fees, trust fees, and miscellaneous service income） and all bank expenses （including interest on all borrowed funds, salaries, wages, and employee benefits, overhead costs, loan-loss expense, taxes, and miscellaneous operating costs.） The differenc

26、e between operating revenues and expenses （including tax obligations） is referred to as net income.5-10. In rank order what are the most important revenue and expense items on a Report of Income?By dollar volume in most recent years the rank order of the revenue and expense items on a banks Report o

27、f Income is:Rank Order Revenue Items Expense Items 1 Loan Income Deposit Interest 2 Security Income Interest on Nondeposit Borrowings 3 Service Charges on Deposits Salaries, Wages, and and Other Deposit Fees Employee Benefits 4 Other Operating Revenues Miscellaneous Expenses5-11. What is the relatio

28、nship between the Provision for Loan Losses on a banks Report of Income and the Allowance for Loan Losses on its Report of Condition?Gross loans equal the total of all loans currently outstanding that are recorded on the banks books. Net loans are equal to gross loans less any interest income on loa

29、ns already collected by the bank but not yet earned and also less the allowance for loan-loss account （or bad-debt reserve）. The allowance for loan losses is built up gradually over time by an annual noncash expense item that is charged against the banks current income, known as the Provision for Lo

30、an Losses. The dollar amount of the annual loan-loss provision plus the amount of recovered funds from any loans previously declared worthless （charged off） less any loans charged off as worthless in the current period is added to the allowance-for-loan-losses account. If current charge-offs of worthless loans exceed the annual loan-loss provision plus any recov