Podcast
Questions and Answers
What is the primary distinction between outside liability and inside liability in a financial institution?
What is the primary distinction between outside liability and inside liability in a financial institution?
- Outside liability refers to funds from depositors, while inside liability refers to funds from owners (correct)
- Outside liability refers to long-term borrowing, while inside liability refers to short-term borrowing
- Outside liability refers to funds from owners, while inside liability refers to funds from depositors
- Outside liability refers to short-term borrowing, while inside liability refers to long-term borrowing
What is the main purpose of earning assets in a financial institution?
What is the main purpose of earning assets in a financial institution?
- To increase revenue
- To maximize profit (correct)
- To decrease cost
- To minimize risk
What is the key characteristic of non-earning assets in a financial institution?
What is the key characteristic of non-earning assets in a financial institution?
- They generate high earnings
- They are unable to generate earnings (correct)
- They are used for long-term investing
- They are used for short-term borrowing
What is the primary goal of financial institutions?
What is the primary goal of financial institutions?
What is the difference between asset structure and liability structure in a financial institution?
What is the difference between asset structure and liability structure in a financial institution?
What is the purpose of a balance sheet in a financial institution?
What is the purpose of a balance sheet in a financial institution?
What type of liability is capital contributed by owners?
What type of liability is capital contributed by owners?
What is the relationship between depositors and financial institutions?
What is the relationship between depositors and financial institutions?
What is the term used to describe the bottom line of a financial institution's balance sheet?
What is the term used to describe the bottom line of a financial institution's balance sheet?
What is the key difference between on-balance sheet items and off-balance sheet items?
What is the key difference between on-balance sheet items and off-balance sheet items?