Financial Liquidity and Cost Management Quiz
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Questions and Answers

What is the purpose of reclassifying assets and liabilities in a balance sheet?

To separate assets that generate income from others and liabilities that have a cost from the others.

What is the key component of Interest Earning Assets (IEA)?

Loans

What is the key component of Interest Bearing Liabilities (IBL)?

Due to customers

What does the IEA - IBL spread indicate?

<p>The bank's income generation capacity</p> Signup and view all the answers

What is the Net Interest Income Weight equation?

<p>$\frac{Net<del>Interest</del>Income}{Total<del>Operating</del>Income}$</p> Signup and view all the answers

What is the Net Fees and Commissions Weight equation?

<p>$\frac{Net<del>Fees</del>and<del>Commissions}{Total</del>Operating~Income}$</p> Signup and view all the answers

What is the Net Trading and Other Operating Income Weight equation?

<p>$\frac{Net<del>Trading</del>and<del>Other</del>Operating<del>Income}{Total</del>Operating~Income}$</p> Signup and view all the answers

What is the Loan to Deposit Ratio (LD Ratio) equation?

<p>$\frac{Loans}{Customer<del>Direct</del>Funding}$</p> Signup and view all the answers

What is Direct Funding?

<p>Customer Deposits + Securities Issued</p> Signup and view all the answers

What is the equation for Positive Yield on Assets (A)?

<p>$Positive<del>Yield</del>on<del>Assets</del>(A) = Interest<del>Earning</del>Assets$</p> Signup and view all the answers

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