The level of competition is an industry characteristic that will favorably affect cash flows, because a high level of competition may increase a bank's volume of business or increase the prices it can charge for its services. False ____ results from a bank's sale of securities.
Cash flow from investing activities is considered the most important category on the statement of cash flows because it is considered the best measure of expected income. Which of the following transactions does not affect cash during a period? Which one of the following affects cash during a period?
Demand deposit accounts Even if other external forces (such as interest rates) are unchanged, a commercial bank's expected cash flows can change in response to a change in its management skills. True Changes in ____ are a factor affecting the value of a commercial bank over which the bank has some control.
Ratio analysis The level of competition is an industry characteristic that will favorably affect cash flows, because a high level of competition may increase a bank's volume of business or increase the prices it can charge for its services. False ____ results from a bank's sale of securities.
Floating-rate loans cannot completely eliminate interest rate risk ; if the cost of funds is changing more frequently than the rate on assets, the bank's net interest margin is still affected by interest rate fluctuations. True. Parsons Bank reported $3 million in interest revenues and $1 million in interest expenses.
Gross interest expenses of banks are normally higher in periods when market interest rates are higher. True. For most banks, the average duration of liabilities exceeds the average duration of assets, so the duration gap is positive. False.