Revision Questions:

1. The role of the Central Bank in the economy: The Federal Reserve system and its role in banking and economy (Chapter 1, p 11 to 12)
2. The role of commercial banks in the economy (Chapter 1, p 13)

3. Gramm-Leach-Bliley Act 1999 (Chapter 1, p 48) 4. Regulators use the CAMELS system to analyze bank risk. What does CAMELS mean and give explanations to all. Also explain how rating system works (Chapter 2. p 92) 5. What are the primary sources of risk that bank managers face (Chapter 2) 6. In order to increase banks revenues, non-interest income sources available to banks include: . (Chapter 2, p 64 to 65)
7. There are four basic expense management strategies: expense reduction, operating

efficiencies, revenue enhancement, and contribution growth. Describe them. (Chapter 3, p 139 to 141) 8. Specialty Banks also known as Community Banks or Independent banks, describe any one of them (Chapter 3 p. 137) 9. Calculations of PV and FV i.e. Present and Future Values. (Chapter 4, p 147to 149) 10. Preferred stock, LIBOR, Nonbank Bank, Floating Rate, Bullet Loan, Line of Credit, Correspondent Bank, Convertible Debt, Subordinated notes, Letter of Credit, Swap & Trading Book. (Glossary, p 339) 11. Basel Guidelines minimum requirements for bank to be sufficiently capitalized, name the four step process and other details. (Chapter 9)
12.What constitutes bank capital? (Chapter 9, p 323)

13. What is preferred stock and its attraction? (Chapter 9, p331) 14. Banks credit culture in managing credit riskdescribe (Chapter 10)
15.Agriculture loans offered by the bank (Chapter 10, p 368-370)

16. Consumer loans offered by bank describe importance, unacceptable consumer loans provide examples (Chapter 10, p 370) 17. Basic features of 3 functions underlying the credit process at the commercial banks (Chapter 10, p 354) 18. Five Cs of credit in the bank and five Cs of bad credit (Chapter 10, p 356)
19.Describe the subprime loans, (Chapter 12, p 421-422 ) 20.Why banks purchase securities, list four objectives with explanations, inventory of different

types of instruments, which they are permitted to purchase. (13 443-466)

21. What types of securities are banks disallowed from buying for investment purposes (Important). 22. What contributes banking business (Important, study pack, pg2). 23. What is global banking (Important, study pack pg2). 24. Give details of your understanding of a bank holding company (Important). 25. The market for US Treasury securities is the most liquid instrument in the world, describe your understanding on US Treasury bills. 26. What is securitization of loan? Discuss the advantages of securitization of loan? (Important) 27. What are the 5 main questions to be addressed in evaluating a commercial loan application? (Important) 28. Give details of commercial bank? (Imp.) 29. Explain the difference between arbitrage, hedge and speculation (Important, refer to glossary pages) 30. Explain how a direct installment loan differs from an indirect installment loan. In addition, explain why the installment loans are profitable for the bank? (Important)

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