Chap006 Quiz PDF

Chapter 6
Measuring and Evaluating the Performance of Banks and Their Principal

Competitors
Fill in the Blank Questions
1. The equity multiplier for a bank measures the amount of _____________________ of the bank
and is one part of the evaluation of the bank's ROE.
Answer: leverage (debt)
2. __________________________ is the risk that has to do with the quality of the bank's assets
and, in particular, the bank's loans.
Answer: Credit risk
3. Solvency (or capital) risk for a bank can be measured by__________________________. List
one way solvency risk can be measured.
Answer: Purchased Funds/Total Liabilities (There are several other ratios that can answer this
question as well)
4. __________________________ are the assets of a financial institution that will mature or be

repriced within a set period of time.
Answer: Interest Sensitive Assets
5. __________________________ is the risk that the value of the financial institution's asset
portfolio (particularly government or other marketable securities) will decline in value.
Answer: Market risk
6. Eurodollars, Fed Funds, Repurchase Agreements, and large CDs together are know as
_____________________.
Answer: Purchased Funds
7. __________________________ is the risk that the financial institution may not be able to meet
the needs of depositors for cash.
Answer: Liquidity risk
8. __________________________ are loans which are past due by 90 days or more.

Answer: Nonperforming loans
Rose/Hudgins, Bank Management and Financial Services, 8/e 79

9. __________________________ reflects the bank's portfolio management policies and the mix
and yield on the bank's securities and is one part of the evaluation of ROE.
Answer: Asset utilization
10. __________________________ reflects the effectiveness of the expense management of the

bank and is one part of the evaluation of ROE.
Answer: Net profit margin
11. __________________________ measures the return to stockholders on their investment in the

bank. It is the product of net profit margin, asset utilization and the equity multiplier.
Answer: ROE
12. __________________________ measures the amount of debt or leverage a bank has and is one
part of the evaluation of the bank's ROE) It is generally a number larger than one.
Answer: Equity multiplier
13. The__________________________ is a standardized report provided by federal regulators which

reports the balance sheet, income statement and other data for all federally supervised banks. It
has this year's data as well as three previous years and also contains information on peer
institutions.
Answer: Uniform Bank Performance Report
14. __________________________ measures the bank's risk of long run survival. It measures the
bank's capital position and shows if there has been any erosion of capital over time.
Answer: Solvency risk (or capital risk)
15. __________________________ is the risk that shifting interest rates in the market will adversely
affect a financial institution's net income or the value of its assets or equity.
Answer: Interest rate risk
16. The ____________________ Act restricts combined auditing and consulting relationships in
order to promote auditor independence and objectivity.
Answer: Sarbanes-Oxley
17. is one of the most widely respected private institutions

that rates the credit quality of financial institutions.
Answer: Thomson’s BankWatch, Inc.
80 Test Bank, Chapter 6

18. refers to the uncertainty regarding the financial firm’s earnings
due to failures in computer systems, errors, misconduct by employees, lightening strikes and
similar events.
Answer: Operational (transactional) risk
19. refers to variability in earnings resulting from actions taken

by the legal system including unenforceable contracts, lawsuits and adverse judgements.
Answer: Legal risk
20. includes violations of rules and regulations. It can include

failure to hold adequate capital which can lead to costly corrective actions.
Answer: Compliance risk
21. is the uncertainty associated with public opinion. Negative

publicity (whether true or not) can affect a financial firm’s earnings by dissuading customers
from using the services of the institution.
Answer: Reputation risk
22. As data processing of financial information becomes more important, managers of financial firms
can realize cost savings from , transferring tasks from inside to firm
itself to other firms specializing in information technology.
Answer: outsourcing
23. A traditional measure of earnings efficiency is the or total interest

income over total earnings assets less total interest expenses over total interest bearing bank
liabilities. It measures the effectiveness of a firm’s intermediation function in the borrowing and
lending of money.
Answer: earnings spread
24. One part of ROE is or net income over pre-tax net operating income
which measures the financial firm’s use of security gains and losses and other tax management
tools to minimize tax exposure.
Answer: tax management efficiency
25. Net profit margin can be split into two parts, and tax management efficiency.
The first part is pre-tax net operating income over total operating revenue which looks at how
many dollars of revenue survive after operating expenses are removed.
Answer: expense control efficiency

True/False Questions
T F 26. Financial institutions that pursue the "quiet life" as a goal are really pursuing risk
minimization.
Answer: True
T F 27. Attempting to maximize a bank's stock value is the key objective for banks which should
have priority over all other bank goals.
Answer: True
T F 28. If the expected stream of future bank shareholder dividends rises, a bank's stock price
should also rise, other factors held constant.
Answer: True
T F 29. If the discount factor associated with the value of a bank's stock rises, the bank's stock
price should rise, other factors held constant.
Answer: False
T F 30. A bank's ROA equals its ROE times the ratio of total assets divided by total equity
capital.
Answer: False
T F 31. According to the textbook a bank's asset-utilization ratio reflects the mix and yield on the
bank's portfolio of assets.
Answer: True
T F 32. The bank's profit margin or ratio of net after-tax income to total operating revenue is a
measure of financial leverage for a bank.
Answer: False
T F 33. The ratio of a bank's net after-tax income to pre-tax net operating income is described in
the text as a measure of tax management efficiency.
Answer: True
T F 34. In the textbook the ratio of pre tax net operating income to total operating revenues is
described as a measure of the effectiveness of a financial institution’s expense-control
efficiency.
Answer: True

T F 35. The ratio of non-performing assets to total loans and leases is a measure of credit risk in
banking.
Answer: True
T F 36. The measure of a bank's efficiency and return known as the "earnings spread" subtracts
total interest expenses from all the bank's interest income and these two items are then
divided by total assets.
Answer: False
T F 37. In recent years the U.S. banking industry's equity multiplier has generally risen in
response to regulatory pressure to raise more capital.
Answer: False
T F 38. If a bank adds more full-time employees and posts the same net operating income, its
employee productivity ratio, as defined in the text, must fall.
Answer: True
T F 39. The most profitable U.S. banks in terms of both ROA and ROE are medium-size
institutions in the asset size range of $100 million to $10 billion, according to the
textbook.
Answer: True
T F 40. ROA measures how capably the management of a financial institution has been
converting the institution's assets into net earnings.
Answer: True
T F 41. The noninterest margin is generally positive for most banks.

Answer: False
T F 42. The ratio of nonperforming assets to total loans and leases is considered to be a measure
of a bank's market risk.
Answer: False
T F 43. Charge-offs represent securities a bank decides to sell because they have declined in
value.
Answer: False
T F 44. Loans past due for 90 days or more are classified as nonperforming assets.
Answer: True

T F 45. The ratio of cash and government securities to total assets is considered to be a measure
of liquidity risk in banking.
Answer: True
T F 46. The ratio of uninsured deposits to total deposits is considered to be a measure of credit
risk in banking.
Answer: False
T F 47. The interest rate spread between market yields on bank debt issues (such as capital notes
and CDs) and the market yields on government securities of the same maturity is
considered to be a measure of market risk in banking.
Answer: False
T F 48. The ratio of a bank's net operating income to the number of a bank's full-time-equivalent
employees is called the employee productivity ratio.
Answer: True
T F 49. Smaller banks usually have fewer liquid assets than larger banks.
Answer: False
T F 50. The bank's asset utilization ratio reflects the effectiveness of the bank's expense
management.
Answer: False
T F 51. The FDIC is a private credit rating company which provides credit ratings on the short
term and long term securities issued by banks.
Answer: False
T F 52. During the 1980's the Comptroller of the Currency, the Federal Reserve and the FDIC
created a new tool to help them analyze the financial condition of banks. This new tool is
called the Uniform Bank Performance Report.
Answer: True
T F 53. Liquidity risk for a bank examines the quality of the bank's assets and, in particular, the
quality of the bank's loans.
Answer: False
T F 54. The bank's degree of asset utilization (AU) or ratio of total operating revenue to total
assets is a measure of asset management efficiency, especially in terms of the mix and
yield on assets.
Answer: True

T F 55. According the case study of the failure of Superior Bank of Chicago and the FDIC’s
takeover of this institution in 2001, the main problem was attributed to misleading
accounting practices of inflating asset values and revenues deflating liabilities and
expenses. The Sarbanes-Oxley Accounting Standards Act of 2002 addresses this issue
and expressly encourages combining auditing and consulting relationships in order to
promote efficiency and profitability of financial institutions.
Answer: False
Multiple Choice Questions
56. The ratio of a bank's interest income from its loans and security investments less interest
expenses on debt issued divided by total earning assets measures a bank's:
A) Net operating margin
B) Net return before special transactions
C) Net interest margin
D) Return on assets
E) None of the above
Answer: C
57. ROE for a bank is calculated by:

A) Dividing net after-tax income by total equity capital.
B) Dividing total operating revenue less operating expenses by total assets.
C) Deducting total interest expenses from total interest income and dividing by total equity
capital.
D) Noninterest income less noninterest expenses divided by total earning assets.
E) None of the above.
Answer: A
58. The difference between such sources of bank income as service charges on deposits and trust-
service fees and such sources of bank expenses as salaries and wages and overhead expenses
divided by total assets or total earning assets is called the:
A) Net profit margin
B) Net operating margin
C) Net noninterest margin
D) Net return on assets
Answer: C
59. A bank's ROE equals its ROA times its:

A) Net profit margin

B) Total assets divided by total equity capital
C) Total operating revenues divided by total assets
D) Ratio of net after-tax income to total operating revenues
Answer: B
60. The earnings spread for a bank is equal to:

A) Total interest income divided by total earning assets less total interest-expense divided by
total interest-bearing bank liabilities.
B) Total interest income less total interest expenses divided by earning assets.
C) Total operating revenues less total operating expenses divided by total assets.
D) Total cash and noncash expenses subtracted from interest and noninterest income divided by
total assets.
Answer: A
61. The so-called employee productivity ratio for a bank is equal to:
A) Net operating revenue less total interest expenses per employee.
B) Total interest and noninterest expense per employee
C) Net operating income per full-time-equivalent employee
D) Total operating earnings less salaries and wages expense per employee.
Answer: C
62. According to the textbook the most profitable banks in the United States in 2007 fell in the
asset size range of:
A) Under $25 million in total assets
B) Under $100 million in total assets
C) Between $100 million and $10 billion in total assets
D) Over $10 billion in total assets
Answer: D
63. A bank's stock price will tend to rise if the:

A) Value of the stream of future stockholder dividends is expected to increase
B) The banking organization's perceived level of risk has fallen
C) Expected dividends increase, while perceived level of risk declines
D) All of the above.
Answer: D
64. The ratio that equals total interest income divided by total earning assets less total interest
expense divided by total interest-bearing liabilities is known as the:
A) Earnings base
B) Earnings spread

C) Net income margin
D) Net return prior to special transactions
Answer: B
65. What do loans and security investments represent for a bank?

A) Earning assets
B) Classified assets
C) Discretionary accounts
D) Market-valued assets
Answer: A
66. The so-called tax-management efficiency ratio consists of:

A) Total tax liabilities over net income
B) Tax-exempt assets over taxable assets
C) Net income over pre-tax net operating income
D) Taxes owed over total liabilities of a bank
Answer: C
67. The ratio of net loans to total assets is considered to be a measure of what form of risk in
banking?
A) Credit risk
B) Liquidity risk
C) Market risk
D) Interest-rate risk
Answer: B
68. OE for a bank reflects:

A) How well the assets of the bank are managed
B) The bank's use of leverage
C) How well the bank controls expenses
D) All of the above
Answer: D
69. A ratio that can be used to measure a bank's credit risk would be:
A) Net loans/total assets
B) Interest sensitive assets/interest sensitive liabilities
C) Total assets/number of full time employees
D) Nonperforming loans/total loans
Answer: D

70. A bank that has a low profit margin most likely:
A) Is doing a poor job of controlling expenses
B) Has a small amount of financial leverage
C) Has a small amount of liquidity risk
D) Has assets that are not very productive
Answer: A
71. A bank that has a high asset utilization (AU) ratio most likely:
A) Is doing a poor job of controlling expenses
B) Has a small amount of financial leverage
C) Has a small amount of liquidity risk
D) Is allocating assets to the most productive investments
Answer: D
72. Which of the following would be the best example of a ratio used to examine the cost of one of
the bank's liabilities?
A) Demand deposits/ total assets
B) Interest on time deposits/ total time deposits
C) Interest on real estate loans/ total real estate loans
D) Interest sensitive assets/ interest sensitive liabilities
Answer: B
73. Which of the following would be the best example of a ratio used to examine the return of one
of the bank's assets?
Answer: C
74. Which of the following would be the best example of a ratio used to examine the bank's
interest rate risk?
Answer: D
75. A bank expects to pay a dividend next year of $3.45 and also expects dividends to grow at a
rate of 7% from now on. If the appropriate discount rate is 15%, what should this bank's stock
price be in the market?
A) $23.00
B) $43.13
C) $46.14

D) $49.29
E) $24.61
Answer: B
76. Using the information listed below for Carter State Bank, what is this bank's ROE?
Net income $55 million
Total operating revenue $650 million
Total assets $4,055 million
Total equity capital $350 million
A) 8.46 percent
B) 16.03 percent
C) 15.71 percent
D) 1.36 percent
Answer: C
77. Using the information listed below for Carter State Bank, what is this bank's ROA?
A) 8.46 percent
B) 16.03 percent
C) 15.71 percent
D) 1.36 percent
Answer: D
78. Using the information listed below for Carter State Bank, what is this bank's net profit margin?

A) 8.46 percent
B) 16.03 percent
C) 15.71 percent
D) 1.36 percent
Answer: A
79. Using the information listed below for Carter State Bank, what is this bank's asset utilization
ratio?
Total equity Capital $350 million
A) 8.46 percent
B) 16.03 percent
C) 15.71 percent
D) 1.36 percent
Answer: B
80. The TRC Bank has a net profit margin of 7.5%, an asset utilization ratio of 18%, an equity
multiplier of 20 times. What is this bank's ROA?
A) 27.00 percent
B) 1.35 percent
C) 7.50 percent
D) 1.50 percent
E) 3.6 percent
Answer: B
81. The TRC Bank has a net profit margin of 7.5%, an asset utilization ratio of 18%, an equity
multiplier of 20 times. What is this bank's ROE?
A) 27.00 percent
B) 1.35 percent
C) 7.50 percent
D) 1.50 percent
E) 3.6 percent
Answer: A
82. The Smith-James Bank has an ROE of 17.5%, an asset utilization ratio of 13% and a net profit
margin of 9%. What is this bank's ROA?

A) 14.96 percent
B) 1.58 percent
C) 1.17 percent
D) 134.62 percent
Answer: C
83. The Smith-James Bank has an ROE of 17.5%, an asset utilization ratio of 13% and a net profit
margin of 9%. What must this bank's equity multiplier be?
A) 14.96 times
B) 1.58 times
C) 1.17 times
D) 134.62 times
Answer: A
84. What is the equity multiplier for a bank where equity is equal to 10 percent of total assets?
A) 90.0
B) 10.0
C) 1.1
D) 110.0
E) 1.0
Answer:
85. Which of the following ratios would be a measure of credit risk?

A) Nonperforming Loans/Net Loans
B) Net Loans/Total Assets
C) Interest Sensitive Assets/Interest Sensitive Liabilities
D) Equity Capital/Total Assets
Answer: A
86. Which of the following ratios would be a measure of market risk?

A) Nonperforming Loans/Net Loans
B) Net Loans/Total Assets
C) Interest Sensitive Assets/Interest Sensitive Liabilities
D) Equity Capital/Total Assets
Answer: E
87. In recent years banks have been __________ profitable than (as) S&Ls and Savings Banks.
A) More
B) Less
C) As
D) Much more
E) Much less
Answer: A

88. Operational risk includes which of the following?
A) Failure of bank’s computer system
B) Closure of a bank for three months due to flooding from a major hurricane
C) Embezzlement of funds of a bank by a teller of the bank
D) Closure of a bank for two weeks due to a fire from a lightening strike
E) All of the above are example of operational risk
Answer: E
89. Brian Smith, CEO of Carter National Bank, decides that interest rates are going to
fall in the future and as a result buys $100 million in 30 year Treasury Bonds for the
bank’s security portfolio. Instead, interest rates rise causing the value of these
bonds to fall. This would be an example of which of the following types of risk?
A) Operational risk
B) Legal risk
C) Compliance risk
D) Strategic risk
E) Reputation risk
Answer: D
90. Chaos State Bank has an old computer system which can go down for weeks at a
time, leaving customers unable to access their accounts online. Many customers
have left the bank for banks with more reliable computer systems. Which type of
risk would this be an example of?
A) Operational risk
B) Legal risk
C) Compliance risk
D) Strategic risk
E) Reputation risk
Answer: A
91. Carson County State Bank has a ratio of equity capital to total assets of 2.5%. The
FDIC which regulates this bank has determined that this is not enough equity capital
and is making the bank issue new stock in the market. In addition, they are not
allowing the bank to issue a dividend to their current stockholders. Which type of
risk would this be an example of?
A) Operational risk
B) Legal risk
C) Compliance risk
D) Strategic risk
E) Reputation risk
Answer: C

92. Everett Bank has just learned that there is a disgruntled former employee who has
created a blog that is telling everyone that Everett Bank has halved their customer
service representatives and so customers have great difficulty getting through to a
live person when there is a problem with their account. Everett is worried that they
may lose customers as a result. Which type of risk would this be an example of?
A) Operational risk
B) Legal risk
C) Compliance risk
D) Strategic risk
E) Reputation risk
Answer: E
93. Norman Bank made a loan of $1,000,000 to Jarod LeFevre. Jarod has declared
bankruptcy and Norman Bank has just learned that the judge in the case has ruled
that Jarod does not have to pay any of the loan back or forfeit any of his assets.
Which type of risk would this be an example of?
A) Operational risk
B) Legal risk
C) Compliance risk
D) Strategic risk
E) Reputation risk
Answer: B
94. Forrest Fennell is thinking about investing in Capital City Bank. He is examining
certain ratios of the bank including the ratio of nonperforming loans to total loans
and leases and the provision for loan losses to total loans and leases. What type of
risk is Forrest attempting to measure with these ratios?
A) Credit risk
B) Liquidity risk
C) Market risk
D) Interest rate risk
E) Operational risk
Answer: A
95. Gerald Wilkens is thinking about investing in Tallahassee State Bank. He is

examining certain ratios of the bank including the ratio of cash assets and
government securities to total assets and purchased funds to total assets. What type
of risk is Gerald attempting to measure with these ratios?
A) Credit risk
B) Liquidity risk
C) Market risk

E) Operational risk
Answer: B
96. Amy Farmer is thinking about investing in the Guthrie National Bank. She is
examining certain ratios of the bank including the ratio of the book value of the
assets to the market value of the assets and the market value of the bonds held by
the bank to their recorded value. What type of risk is Amy attempting to measure
with these ratios?
A) Credit risk
B) Liquidity risk
C) Market risk
E) Operational risk
Answer: C
97. Paul Smith is thinking about investing in Capital City Bank. He is examining
certain ratios of the bank including the ratio of interest sensitive assets to interest
sensitive liabilities and uninsured deposits to total deposits. What type of risk is
Paul attempting to measure with these ratios?
A) Credit risk
B) Liquidity risk
C) Market risk
E) Operational risk
Answer: D
98. The Garic State Bank of New Orleans was under water for three weeks after
Hurricane Katrina hit the state. The lobby is full of mud and other debris. Many of
the valuables stored in the bank’s safety deposit boxes have been ruined. John
Garic, the President and CEO of the bank, has been working night and day to reopen
the bank. What type of risk has John been dealing with?
A) Credit risk
B) Liquidity risk
C) Market risk
E) Operational risk
Answer: E
99. Castle State Bank has the following financial information.
Balance Sheet Income Statement

Cash $100 Interest Income $400
Securities Investments $600 Interest Expenses ($150)
Net Loans $1200 Non-Interest Income $50
Net Premises and Equip. $300 Non-Interest Expenses ($100)
Total Assets $2200 Provision for Loan Losses ($60)
Deposits $1100 Pre Tax Net Operating Income $140
Non-Deposit Borrowings * $800 Securities Gains (Losses) ($40)
Equity Capital $300 Taxes ($45)
Total Liabilities and Equity $2200 Net Income $55
* All Purchased Funds
Use this information to calculate Castle State Bank’s ROE

A) 20.45%
B) 18.33%
C) 12.22%
D) 7.33%
E) 2.5%
Answer: B
100.Castle State Bank has the following financial information.


Use this information to calculate Castle State Bank’s ROA

A) 20.45%
B) 18.33%
C) 12.22%
D) 7.33%
E) 2.5%
Answer: E
101. Castle State Bank has the following financial information.

Use this information to calculate Castle State Bank’s net profit margin
A) 20.45%
B) 18.33%
C) 12.22%
D) 7.33%
E) 2.5%
Answer: C

Use this information to calculate Castle State Bank’s asset utilization ratio
A) 20.45%
B) 18.33%
C) 12.22%
D) 7.33%
E) 2.5%
Answer: A


Use this information to calculate Castle State Bank’s equity multiplier

A) 20.45 times
B) 18.33 times
C) 12.22 times
D) 7.33 times
E) 2.5 times
Answer: D

Use this information to calculate Castle State Bank’s earnings spread

A) 37.5%
B) 22.22%
C) 14.33%
D) 7.89%
E) 2.5%
Answer: C
105.Harrison Bank has the following financial information.
Net Profit Margin 12.5%

Net Income $1000
Total Assets $62,500
Total Equity $6250
What is this bank’s ROA?

A) 1.6%
B) 10%
C) 12.8%
D) 16%
Answer: A

Net Income $1000
Total Equity $6250
What is this bank’s ROE?

A) 1.6%
B) 10 %
C) 12.8%
D) 16%
Answer: D

Net Income $1000
Total Equity $6250
What is this bank’s Equity Multiplier

A) 1.6 times

B) 10 times
C) 12.8 times
D) 16 times
Answer: B
ROE 16%
Net Income $1000
Total Equity $6250
What is this bank’s asset utilization ratio?

A) 1.6%
B) 10%
C) 12.8%
D) 16%
Answer: C

Net Income $1000
Total Equity $6250
What is this bank’s total operating revenue?

A) $125
B) $8000
C) $488,281
D) $31,250,000
Answer: B
110.Which assets are excluded from risk assets?

A) Real Estate Loans

B) Commercial Paper
C) Plant and Equipment
D) Commercial and Industrial Loans
E) All of the above are risk assets
Answer: C

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What are the main risks banks face according to the text?

What are the main risks banks face according to the text?

What are three ratios used to evaluate bank performance mentioned in the text?

What are three ratios used to evaluate bank performance mentioned in the text?

Chapter 6

Measuring and Evaluating the Performance of Banks and Their Principal

Fill in the Blank Questions

4. __________________________ are the assets of a financial institution that will mature or be

8. __________________________ are loans which are past due by 90 days or more.

Rose/Hudgins, Bank Management and Financial Services, 8/e 79

10. __________________________ reflects the effectiveness of the expense management of the

11. __________________________ measures the return to stockholders on their investment in the

13. The__________________________ is a standardized report provided by federal regulators which

17. is one of the most widely respected private institutions

80 Test Bank, Chapter 6

19. refers to variability in earnings resulting from actions taken

20. includes violations of rules and regulations. It can include

21. is the uncertainty associated with public opinion. Negative

23. A traditional measure of earnings efficiency is the or total interest

Rose/Hudgins, Bank Management and Financial Services, 8/e 81

82 Test Bank, Chapter 6

T F 41. The noninterest margin is generally positive for most banks.

Rose/Hudgins, Bank Management and Financial Services, 8/e 83

84 Test Bank, Chapter 6

Multiple Choice Questions

57. ROE for a bank is calculated by:

59. A bank's ROE equals its ROA times its:

Rose/Hudgins, Bank Management and Financial Services, 8/e 85

60. The earnings spread for a bank is equal to:

63. A bank's stock price will tend to rise if the:

86 Test Bank, Chapter 6

65. What do loans and security investments represent for a bank?

66. The so-called tax-management efficiency ratio consists of:

68. OE for a bank reflects:

Rose/Hudgins, Bank Management and Financial Services, 8/e 87

88 Test Bank, Chapter 6

Net income $55 million

Total operating revenue $650 million

Total assets $4,055 million

Total equity capital $350 million

Net income $55 million

Total operating revenue $650 million

Total assets $4,055 million

Total equity capital $350 million

Net income $55 million

Total operating revenue $650 million

Total assets $4,055 million

Total equity capital $350 million

Rose/Hudgins, Bank Management and Financial Services, 8/e 89

Net income $55 million

Total operating revenue $650 million

Total assets $4,055 million

Total equity Capital $350 million

90 Test Bank, Chapter 6

85. Which of the following ratios would be a measure of credit risk?

86. Which of the following ratios would be a measure of market risk?

Rose/Hudgins, Bank Management and Financial Services, 8/e 91

92 Test Bank, Chapter 6

95. Gerald Wilkens is thinking about investing in Tallahassee State Bank. He is