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BFF2401 - Commercial banking and finance - S2 2025
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Which of the following are reasons for the specialness of financial intermediaries?
Which of the following is an adequate definition of an asset transformer?
Sakura Bank has the following information:
- Share price at beginning of period = $30
- Share price at end of period = $35
- Dividend paid during period = $1.50
Calculate the bank shareholders’ total return over the last period.
(NOTE: By default, the unit of the answer is %. The answer must be input with two 2 decimal places, i.e. if the answer is 12%, please input 12.00)
The most important source of bank funding is:
Bank ABC has a Return on Equity (ROE) equal to 24%, an equity/debt ratio equal to 0.05 and an asset utilisation ratio equal to 0.07. From this we know that the profit margin of bank ABC is:(NOTE: By default, the unit of the answer is %. The answer must be input with two 2 decimal places, i.e. if the answer is 12%, please input 12.00)
| Balance Sheet (in $million) | |||
| Assets | Liabilities and Equity | ||
| Cash | 450 | Demand deposits | 6,635 |
| Receivables from other FIs | 1,350 | Small time deposits | 10,800 |
| Investments | 4,050 | Jumbo CDs | 3,200 |
| Federal funds sold | 2,025 | Federal funds purchased | 2,250 |
| Loans | 15,525 | Equity | 2,200 |
| Premises | 1,685 | ||
| Total assets | 25,085 | Total liabilities and equity | 25,085 |
| Income Statement (in $million) | |||
| Interest income | 2,700 | ||
| Interest expense | (1,650) | ||
| Provision for loan losses | (180) | ||
| Noninterest income | 160 | ||
| Noninterest expense | (420) | ||
| Taxes | (90) |
Which of the following is NOT a major function of financial intermediaries?
Sakura Bank has the following information:
- Share price at beginning of period = $30
- Share price at end of period = $35
- Dividend paid during period = $1.50
Calculate the bank’s capital gain rate over the last period.
(NOTE: By default, the unit of the answer is %. The answer must be input with two 2 decimal places, i.e. if the answer is 12%, please input 12.00)
A high-quality loan book for Australian banks during the global financial crisis (GFC) meant that:
When a bank adopts a more conservative (lower-risk) lending strategy and/or uses more equity finance relative to debt finance, it expects to generate a higher Return on Equity (ROE).