1. Is banking a particularly risky business?

  
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Yes
 
No

 
  What types of risks do banks face?
(Select all that applies)
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liquidity risk
 
default risk
interest-rate risk
credit risk
 
Correct answer
liquidity risk
interest-rate risk
credit risk

 
What is asset?*
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is something that an individual or a firm owes
is something of value owned by an individual or a firm
 
is a statement that shows an individual’s or a firm’s financial position on a particular day
are liquid assets that banks trade in financial markets

 
What is a liability?*
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is something that an individual or a firm owes
 
is something of value owned by an individual or a firm
is a statement that shows an individual’s or a firm’s financial position on a particular day
are liquid assets that banks trade in financial markets

 
What is a balance sheet?*
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is something that an individual or a firm owes
is something of value owned by an individual or a firm
is a statement that shows an individual’s or a firm’s financial position on a particular day
 
are liquid assets that banks trade in financial markets

 
What is a Shareholders’ equity?
(Select all that applies)
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is the difference between the value of a firm’s assets and the value of its liabilities
 
is also referred to as the firm’s net worth
 
In banking it is usually called bank capital
 
represents the dollar amount the owners of the firm would be left with if the firm were to be
closed, its assets sold, and its liabilities paid off
 
 
What are the examples of Liabilities?
(Select all that applies)
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Interest payments to other banks.
 
Savings account interest due to customers.
 
Stock distributions
 
Capital Stock