100% solutions to Introduction to Banking course assessment

Welcome to your introductiontobanking

Match the correct description to each of the financial institution categories.

Central Banks- Oversee and manage all the banks in their respective country and set monetary policy

Retail Banks- Offer products and services to individual consumers including chequing/checking and savings accounts, loans, mortgages, and credit cards

Commercial Banks – Work with small, medium, and large businesses to serve their financial needs by offering services such as business loans and trade finance

Investment Banks – Operate in the capital markets to help clients raise capital through underwriting and issuance of securities

Identify the appropriate type of financial institutions for each description below.

Full-service banks that offer retail banking, commercial banking, and investment banking services to any potential client – Universal Banks

Financial institutions that serve a specific demographic and are owned by members – Credit Unions

Banks that focus on serving individual consumers and owner-operated small companies, and tend to focus on their immediate community -Community Banks

Banks that offer retail and small business banking services through online platforms – Online Banks

Banks that focus on helping clients access capital markets and raise capital – Investment Banks

Banks that focus on retail banking and commercial banking services and tend to have an international reach, with their main operations based in their home market – Large Banks

Which of the following statements about private banking is true?

Private banking is often provided on a personal basis through a dedicated relationship manager.

Match the correct descriptions of business, commercial, and corporate banking.

Business Banking- Serves owner-operated businesses with an annual revenue of up to $5 million and have a need for loans of less than $1 million

Commercial Banking – Serves medium-sized business with up to 500 employees and multiple operating locations

Corporate Banking – Serve businesses with over $100 million in revenue that are growing through mergers and acquisitions or moving into the publicly traded space

Mr. Sampson has $2 million in cash sitting in an operating account and is looking to invest in the stock market and earn profits on a portfolio of equities. He is most likely to seek what service?

Private banking

Bulge bracket refers to:

Investment banking services provided to multinational corporates in dealing with very large financial transactions

Technology Inc. is a software company based in the United States, with over 600 employees in 10 locations across the country. The company has recently signed a EUR 2 million contract with a European supplier and is looking for foreign exchange service to help facilitate the transaction. This is an example of services which would be provided in:

Commercial Banking

Which of the following is NOT a typical product or service offered in retail banking?

Tax advisory service

Which of the following items is NOT found on the asset side of a bank’s balance sheet?

Deposits

Given the following information on a bank’s balance sheet, calculate the net interest income.

$80.33MM

Which of the following formulas is correct?

ROE = (Profit After Tax / Total Assets) x (Total Assets / Equity)

Given the following balance sheet structures of two companies, what is each company’s ROE and which company has the higher ROE figure.

Company A; 5.75%

Calculate the operating efficiency ratio using the following information.

69.3%

Which of the following statements about asset-liability matching (ALM) is NOT true?

ALM is the practice of ensuring there are equal amounts of assets and liabilities on a bank’s balance sheet.

Which of the following are the two steps in the securitization process?

(1) The bank combines multiple assets into a single compound asset and determines the return by taking the weighted average of the return offered by each individual asset; (2) the compound asset is sold as securities to third party investors.

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