Mid-Term Exam. 2022

MINISTRY OF EDUCATION AND TRAINING MID-TERM EXAMINATION
VIETNAM
NATIONAL ECONOMICS UNIVERSITY COMMERCIAL BANKING 1 COURSE
Program: AEP
Date: 11/4/2022 (submit by 18h)
Duration: 90 minutes
School of Banking and Finance
Commercial Banking Department
No: 01
Part 1: Multiple Choice Questions. Choose the best answer (15 marks)
1. Banks perform the indispensable task of:
A) Creating money without making loan.
B) Absorbing the excess liquidity created by other financial institutions
C) Intermediating between surplus-spending individuals or institutions and deficit-spending individuals or
institutions
D) Issuing risky deposits
E) None of the above
2. Examples of imperfections in the financial system which allow banks to exist include which of the following?
A) Informational asymmetry
B) Efficiency of markets
C) All individuals and businesses have full information about all investment opportunities.
D) All individuals and businesses have no difficulty meeting their liquidity needs on their own.
E) All of the above are examples of the imperfections that exist.
3. Bank assets fall into each of the following categories except:
A) Loans.
B) Investment securities.
C) Demand deposits.
D) Noninterest cash and due from banks.
E) Other assets
4. Which of the following adjustments are made to gross loans and leases to obtain net loans and leases?
A) The loan and lease loss allowance is subtracted from gross loans
B) Unearned income is subtracted from gross interest received
C) Investment income is added to gross interest received
D) A and B.
E) A. and C.
5. The account that is built up by annual noncash expense deductions and is subtracted from Gross Loans on the
Report of Condition is:
A) Unearned income
B) Nonperforming loans
C) Allocated loan risk deductions
Close book exam -No cell phones, tablets and laptops – No discussion among students
D) Allowance for possible loan losses
E) None of the above.
6. Branch banking generally does all of the following except:
A). Lower expenses.
B). Allow for greater asset diversification.
C). Expand each bank’s consumer deposit base.
D). Increase the number of competitors
Part 2: True/False Question (No explanation needed) (15 marks)

1. The role performed by banks in the economy in which they transform savings into credit is known as
the connecting role
2. Loan-loss reserves set aside to cover a particular loan or loans expected to be a problem or present
the bank with above-average risk are known as general reserves.
3. Off-balance sheet items for a bank carry no risk for the bank.
4. Required reserves provide a bank with liquidity
5. Demand deposits are among the least volatile of a bank’s sources of funds with the shortest potential
maturity.
6. Finance companies can mobilize deposits from individuals.
Part 3: Assignments (30 marks)

3.1. Theoretical question: What is a financial intermediary? Is a bank a type of financial intermediary? And
how can bank perform the intermediation role?
3.2. Practical question: What are opportunities and challenges of financial services in this era? Examples
from Vietnamese banks or one Vietnamese bank.
Part 4: Solve the Problem (40 marks)

4.1. ANZ Bank finds that it can attract the following amounts of deposits if it offers new depositors and
those rolling over their maturing CDs the interest rates indicated below:
Expected Volume Rate of Interest
of New Deposits Offered Depositors
$2 million 3.00%
17 million 3.25
50 million 3.50
90 million 3.75
134 million 4.50
Management anticipates being able to invest any new deposits raised in loans yielding 6.5 percent. How far
should this bank go in raising its deposit interest rate in order to maximize total profits (excluding interest
costs)?
4.2. Jasper National Bank has just submitted its Report of Condition to the FDIC. Please fill in the missing
items from its statement shown below (all figures in millions of dollars):
Report of Condition
Total assets $2,500
Cash and due from Depository Institutions 87
Securities 233
Federal Funds Sold and Reverse Repurch. 45
Gross Loans and Leases ?
Loan Loss Allowance 200
Net Loans and Leases 1700
Trading Account Assets 20
Bank Premises and Fixed Assets ?
Other Real Estate Owned 15
Goodwill and Other Intangibles 200
All Other Assets 175
Total Liabilities and Capital ?
Total Liabilities ?
Total Deposits ?
Federal Funds Purchased and Repurchase Agreements. 80
Trading Liabilities 10
Other Borrowed Funds 50
Subordinated Debt 480
All Other Liabilities 40
Total Equity Capital ?
Perpetual Preferred Stock 2

Common Stock 24
Surplus 144
Undivided Profit 70

Mid-Term Exam. 2022

Uploaded by

Copyright:

Available Formats

Mid-Term Exam. 2022

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mid-Term Exam. 2022

Uploaded by

Copyright:

Available Formats

MINISTRY OF EDUCATION AND TRAINING MID-TERM EXAMINATION

Part 2: True/False Question (No explanation needed) (15 marks)

Part 3: Assignments (30 marks)

Part 4: Solve the Problem (40 marks)

Perpetual Preferred Stock 2

You might also like