Question 116

Which of the following reports have been suggested by the FDIC that banks should produce in addition to the
usual probabilistic analysis and stress tests in order to gauge liquidity issues?
I. Cash flow gaps
II. Funding availability
III. Critical assumptions used in credit projections
  • Question 117

    Returns on two assets show very strong positive linear relationship. Their correlation should be closest to
    which of the following choices?
  • Question 118

    A portfolio manager is interested in computing risk measures for his bond investment portfolio. Which of the
    following measures the sensitivity of duration to interest rates?
  • Question 119

    Gamma Bank provides a $100,000 loan to Big Bath retail stores at 5% interest rate (paid annually). The loan is
    collateralized with $55,000. The loan also has an annual expected default rate of 2%, and loss given default at
    50%. In this case, what will the bank's expected loss be?
  • Question 120

    Which one of the following market risk measures evaluates the bank's earnings sensitivity?