商业银行管理彼得S罗斯英文原书第8版英语试题库Chap015.docx

商业银行管理彼得S罗斯英文原书第8版英语试题库Chap015.docx

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商业银行管理彼得S罗斯英文原书第8版英语试题库Chap015

Chapter15

TheManagementofCapital

FillintheBlankQuestions

1.Theriskthathastodowithbankstradinginforeigncurrenciesiscalled_________________________.

Answer:

exchangerisk

2.Theriskthathastodowithfraud,embezzlementandbankrobberiesiscalled__________________.

Answer:

crimerisk

3._________________________ismeasuredbytheparvalueofthesharesofcommonequityoutstanding.

Answer:

Commonstock

4.__________________istheamountinexcessofparvaluepaidbythebank'sshareholders.

Answer:

Surplus

5._________________________arethenetearningsofthebankwhichhavebeenkeptbythebankratherthandistributedasdividendstostockholders.

Answer:

UndividedProfits（orretainedearnings）

6.Corecapitalsuchascommonstock,surplus,undividedprofits,qualifyingnoncumulativepreferredstock,etc.isreferredtoas__________________capitalasdefinedbytheBaselagreement.

Answer:

Tier1

7.TheinternationaltreatyinvolvingtheU.S.and11otherleadingindustrializedcountriestoimposecommoncapitalrequirementsonallbanksisknownasthe_________________________.

Answer:

BaselAgreement

8.Supplementalcapitalsuchastheallowanceforloanlosses,subordinateddebt,mandatoryconvertibledebt,intermediate-termpreferredstock,cumulativepreferredperpetualstockandequitynotesismorecommonlyknownas_________________________.

Answer:

Tier2capital

9.Whenitemsonabank'sbalancesheetaremultipliedbytheappropriaterisk-weightingfactortheyareoftencalled_________________________.

Answer:

risk-weightedassets

10.Thefactthatabankmaysufferdeficienciesinqualitycontrol,inefficienciesinproducinganddeliveringofservices,weatherdamage,agingorfaultycomputersystems,errorsinjudgmentbymanagementandfluctuationsineconomythatcouldadverselyaffectthebank'sperformanceisknownas_________________________risk.

Answer:

operational

11.Onedefenseagainstriskforthebankistospreadoutabank'screditaccountsanddepositsamongawidevarietyofcustomers,includinglargeandsmallaccountsdifferentindustries,etc.Thisdefenseisknownas_________________________.

Answer:

portfoliodiversification

12.Onedefenseagainstriskisforthebanktoseekoutcustomerslocatedindifferentcommunitiesorindifferentcountries.Thisdefenseisknownas_________________________.

Answer:

geographicdiversification

13.Whenallelsefails,theultimatedefenseagainstriskinbankingis_________________________.

Answer:

owners'capital（networth）

14.Thelargestcomponentofcapitalamongthriftinstitutionsis_____________.

Answer:

retainedearnings

15.Thelargestcomponentofcapitalamongbanksis____________.

Answer:

surplus

16.____________modelsattempttomeasurepriceormarketriskofaportfolioofassetsandattempttodeterminethemaximumlosstheymightsustainoveradesignatedperiodoftime.

Answer:

Valueatrisk（VaR）

17.ThelatestrevisiontotheBaselaccordisknownas__________andwillaffectonlyabout20ofthelargestU.S.banksandahandfulofleadingforeignbanks.

Answer:

BaselII

18.____________modelsmeasurelenderexposuretodefaultsorcreditdowngrades.

Answer:

CreditRisk

19.Creditriskmodelswillbe________widelyusedwhenBaselIItakeseffect.

Answer:

more

20.AtthecenterofthedebateoftheBaselAgreementisthe,headquarteredinBaselSwitzerland,whichassistscentralbanksintheirtransactionswitheachotherandservesasaforumforinternationalfinancialissues.

Answer:

BankforInternationalSettlements（BIS）

21.representsfundssetasideforcontingenciessuchaslegalactionagainsttheinstitutionaswellasprovidingareservefordividendsexpectedtobepaidbutnotyetdeclaredandasinkingfundtoretirestockordebtinthefuture.

Answer:

Equityreserves

22.aredebtsecuritiesrepayablefromthesaleofstock.

Answer:

Equitycommitmentnotes

23.isahybridformofequitycapitalissuedtoinvestorsthroughatrustcompany,Thefundsraiseareloanedtothefinancialfirm.Dividendspaidtostockholdersonthistimeofcapitalaretaxdeductible.

Answer:

Trustpreferredstock

24.islong-termdebtcapitalwhoseclaimslegallyfollowclaimsofdepositors.

Answer:

Subordinatednotesanddebentures

25.forbanksincludemortgageservicingrightsandpurchasedcreditcardrelationshipsandcanbecountedaspartofbankcapital.

Answer:

Identifiableintangibleassets

True/FalseQuestions

TF26.Inthefieldofbanking,capitalrefersprincipallytothosefundscontributedbyabank'sowners.

Answer:

True

TF27.Accordingtothetextbookcapitalandriskareintimatelyrelatedtoeachother.

Answer:

True

TF28.Onefundamentalpurposeforregulatingcapitalistolimitlossestothefederalgovernmentarisingfromdepositinsuranceclaims.

Answer:

True

TF29.Depositinsurancesubsidizedbygovernmentencouragesbankstoincreasetheirratiosofcapitaltodeposits.

Answer:

False

TF30.Tier2includesundividedprofits.

Answer:

False

TF31.Corecapitalincludesthesurplusaccountforstock.

Answer:

True

TF32.Undertheinternationalcapital（Basel）agreementTier2capitalmustberaisedtoaminimumof4percentofrisk-weightedassets.

Answer:

False

TF33.Off-balance-sheetcommitmentsofbankscarrycapitalrequirementsundertheinternational（Basel）capitalrequirements.

Answer:

True

TF34.Portfoliodiversificationreferstoseekingoutcustomerslocatedindifferentcommunitiesorcountries,whichpresumablywillexperiencedifferenteconomicconditions.

Answer:

False

TF35.Geographicdiversificationreferstothespreadingoutcreditaccountsanddepositsamongawidevarietyofcustomers,includinglargeandsmallbusinessaccounts,differentindustries,andhouseholdswithavarietyofsourcesofincomeandcollateral.

Answer:

False

TF36.Thelastlineofdefenseagainstbankfailureisowner'scapital,accordingtothetextbook.

Answer:

True

TF37.UndertheFDICImprovementActof1991aU.S.bankpossessingaleverageratiogreaterthan4percentwouldbeconsideredwellcapitalized.

Answer:

False

TF38.UndertheFDICImprovementActof1991abankwhoseleverageratiodropsto2percentorlessisconsideredtobecriticallyundercapitalized.

Answer:

True

TF39.Recentresearchsuggeststhatinterest-ratecontractsdisplayconsiderablylessriskexposurethandoforeign-currencycontracts.

Answer:

True

TF40.TheBaselAgreementoncapitalasdraftedinthe1980sfailedtodealwithmarketrisk.

Answer:

True

TF41.Ifabankbenefitswhenthevalueofaforeigncurrencyrises,thebankissaidtobeinashortposition.

Answer:

False

TF42.Ifabankbenefitswhenaforeigncurrencydeclinesinvalue,thenthebankisinalongposition.

Answer:

False

TF43.Iftheratiooftangibleequitycapitaltototalassetsis2percentorlessitissubjecttobeingplacedinconservatorshiporreceivershipifitscapitalratiosarenotincreasedwithinaprescribedperiodoftimeevenifitsnetworthisstillpositive.

Answer:

True

TF44.Accordingtorecentresearch,bankstockpricesusuallydropwithinaweekafteradividendcutisannounced.

Answer:

True

TF45.EquitynotesareconsideredtobepartofTier1capital.

Answer:

False

TF46.Themostimportantsourceofthriftcapitalintermsofdollarvolumeiscommonstock（parvalue）.

Answer:

False

TF47.ThedailyrateatwhichrobberieshaveoccurredintheU.S.hascontinuedtoclimbinthe1990s.

Answer:

False

TF48.Oneofthereasonstoregulatethecapitalpositionofbanksistolimittheriskofbankfailures,especiallylargebankfailures.

Answer:

True

TF49.DepositswiththeFederalReservebanksareconsideredtohavemoderatecreditriskandarethereforeplacedinthe50percentriskweightcategory.

Answer:

False

TF50.Thelargestcomponentofcapitalamongbanksisretainedearnings.

Answer:

False

TF51.VaRmodelsprovideasinglenumberwhichindicatesthepotentialforlossesonaportfolioofassets.

Answer:

True

TF52.VaRmodelsaremostsuccessfulinassessingpotentialriskwhentheassetsarenon-traded.

Answer:

False

TF53.CreditriskmodelswillprobablynotbeneededwhenBaselIItakeseffect.

Answer:

False

TF54.OneofthekeyinnovationswhichhavebeenproposedinBaselIIistorequirebankstoholdcapitalagainstoperationalrisk.

Answer:

True

TF55.BaselIIwillrequireeachbanktodetermineitsowncapitalrequirementsbasedonitsowncalculatedriskexposure.

Answer:

True

TF56.ItisanticipatedthatBaselIImaylowercapitalrequirementsforthelargestbanks.

Answer:

True

TF57.Theglobalfinancialcrisisof2007-2009highlightedtheimportanceoftakingintoconsiderationabank’sexposuretomarketriskthatarisefromchangesininterestrates,securityprices,andcurrency.

Answer:

True

TF58.Smallerbanksrelymoreheavilyoninternallygeneratedcapitalthanlargerbanks.

Answer:

True

TF59.Awell-capitalizedinstitutionhasaratioofcapitaltorisk-weightedassetsofatleast10percentandfacesnosignificantregulatoryrestrictionsonitsexpansion.

Answer:

True

TF60.Regulatorycapitalfocusonthemarketvalueofequity.

Answer:

False

MultipleChoiceQuestions

61.Accordingtothetextbooktheroleofcapitalisto:

A）Provideacushionagainstfailurerisk.