Questions from Financial Markets

Q: How might the use of an end-of-the-

How might the use of an end-of-the-year balance sheet bias the calculation of certain ratios?

Q: How does the asset utilization ratio for a bank compare to that

How does the asset utilization ratio for a bank compare to that of a retail company? How do the equity multipliers compare?

Q: What is the likely relationship between the interest income ratio and the

What is the likely relationship between the interest income ratio and the noninterest income ratio?

Q: A security analyst calculates the following ratios for two banks. How

A security analyst calculates the following ratios for two banks. How should the analyst evaluate the financial health of the two banks?

Q: What are the definitional differences between Common Equity Tier I, Tier

What are the definitional differences between Common Equity Tier I, Tier I, and Tier II capital?

Q: A bank has an ROA of 1.0 percent. The

A bank has an ROA of 1.0 percent. The industry average ROA is 1.5 percent. How can ratio analysis help the firm’s managers identify the reasons for this difference?

Q: What is the difference between the net interest margin and the spread

What is the difference between the net interest margin and the spread?

Q: How does a bank’s choice of market niche affect its financial ratios

How does a bank’s choice of market niche affect its financial ratios?

Q: How does a bank’s asset size affect its financial ratios?

How does a bank’s asset size affect its financial ratios?

Q: Under the Federal Deposit Insurance Reform Act of 2005, how is

Under the Federal Deposit Insurance Reform Act of 2005, how is a Category I deposit insurance premium determined?