An FI Operating in the United States Funds a US$5

question 81

Multiple Choice

An FI operating in the United States funds a US$5 million residential mortgage in 2014 by allocating capital and by issuing demand deposits. The mortgage represents a loan-to-value of 70 percent. The demand deposits have a reserve requirement of 10 percent and a deposit insurance premium to FDIC of 23 basis points. What is the minimum capital requirement on the mortgage in order for the institution to be adequately capitalized?

• A)$0.
• B)$400,000.
• C)$200,000.
• D)$500,000.
• E)$5,000,000.

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Definitions:

Job Characteristics Model

A framework that suggests jobs can be designed with specific characteristics (skill variety, task identity, task significance, autonomy, and feedback) to enhance job satisfaction, motivation, and productivity.

Individual Differences

Variations or disparities among individuals in terms of traits, abilities, or characteristics.

Expectancy Model

A theory that suggests motivation is based on the expectation of desired outcomes and the value placed on those outcomes.

Motivated

Refers to being driven or encouraged to act or accomplish something due to either internal desires or external rewards.