The Bank Is Considering Changing Its Asset Mix by Moving

question 136

Multiple Choice

The bank is considering changing its asset mix by moving $100 million of commercial loans into Treasury securities.If it does change the asset mix and capital remains the same,the risk-based capital ratio

• A)will not change because the total assets have not changed.
• B)will decrease because the earnings rate on Treasuries is less than on loans.
• C)will increase by 16.67 percent.
• D)will increase because the assets will have less risk.

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Definitions:

Power Resource Theory

A theoretical framework suggesting that the power of social groups, especially in industrial relations and welfare state development, stems from their control over critical resources.

Public Policy

Governmental guidelines or principles directing public administration, which are intended to address societal issues and influence decision making.

Power Shifts

Changes in the distribution of power among individuals, groups, or nations.

Members of Parliament

Are elected or appointed officials in a parliamentary system who represent the citizens in the legislative process and are responsible for making laws and scrutinizing the government.