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2016-FRR – Financial Risk and Regulation (FRR) Series

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Showing 7–9 of 15 questions

Question 7 (Volume C)

The Sarbanes-Oxley Act includes one of the following four requirements for financial institutions in the United States:

Select an option, then click Submit answer.

  • ○

    Risk and control requirements
  • ○

    Market discipline requirements
  • ○

    Capital allocation requirements
  • ○

    Regulatory response to systemic risk requirements
Question 8 (Volume C)

Mega Bank has $100 million in deposits on which it pays 3% interest, and $20 million in equity on which it pays no interest. The loan portfolio of $120 million earns an average rate of 10%. If the rates remain the same, what is the net interest income of Mega Bank?

Select an option, then click Submit answer.

  • ○

    $2 million per year
  • ○

    $5 million per year
  • ○

    $9 million per year
  • ○

    $12 million per year
Question 9 (Volume C)

A risk analyst is considering how to reduce the bank's exposure to rising interest rates. Which of the following strategies will help her achieve this objective?

I. Reducing the average repricing time of its loans

II. Increasing the average repricing time of its deposits

III. Entering into interest rate swaps

IV. Improving earnings capacity and increasing intermediated funds

Select an option, then click Submit answer.

  • ○

    I, II
  • ○

    III
  • ○

    IV
  • ○

    I, II, IV
  • ○

    Reducing the average repricing time of its loans

    II. Increasing the average repricing time of its deposits

    III. Entering into interest rate swaps

    IV. Improving earnings capacity and increasing intermediated funds