Questions from Financial Markets


Q: What are compensating balances? What is the relationship between the amount

What are compensating balances? What is the relationship between the amount of compensating balance requirement and the return on the loan to the FI?

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Q: What does it mean when a bank has a CAMELS rating of

What does it mean when a bank has a CAMELS rating of 2? Of 4?

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Q: How does loan portfolio risk differ from individual loan risk?

How does loan portfolio risk differ from individual loan risk?

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Q: How does the degree of liquidity risk differ for different types of

How does the degree of liquidity risk differ for different types of financial institutions?

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Q: Webb Bank has a composite CAMELS rating of 2, a total

Webb Bank has a composite CAMELS rating of 2, a total risk–based capital ratio of 10.2 percent, a Tier I risk-based capital ratio of 7.2 percent, a CET1 capital ratio of 6.4 percent, and a leverage ra...

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Q: What has been the fastest-growing area of asset business for

What has been the fastest-growing area of asset business for finance companies?

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Q: Why would a DI be forced to sell assets at fire-

Why would a DI be forced to sell assets at fire-sale prices?

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Q: A British bank issues a $100 million, three-year

A British bank issues a $100 million, three-year Eurodollar CD at a fixed annual rate of 7 percent. The proceeds of the CD are lent to a British company for three years at a fixed rate of 9 percent. T...

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Q: Suppose an individual invests $10,000 in a load mutual

Suppose an individual invests $10,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 4 percent of the amount invested and is deducted from the original fund...

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Q: Bank 1, with $130 million in assets and $20 

Bank 1, with $130 million in assets and $20 million in costs, acquires Bank 2, which has $50 million in assets and $10 million in costs. After the acquisition, the bank has $180 million in assets and...

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