The QTL Test Requires That Thrifts

question 11

Multiple Choice

The QTL test requires that thrifts

• A)limit the amount of mortgage-related assets on the balance sheet to improve diversification.
• B)invest in a minimum percentage of government-backed securities to protect their mortgage loans.
• C)lend no more than 80 percent of the value of a home to a borrower to ensure mortgage safety.
• D)keep 35 percent of their assets in safe liquid investments to ensure adequate deposit liquidity.
• E)invest at least 65 percent of their assets in mortgages or mortgage-related assets.

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Definitions:

Price-Earnings Ratio

A financial metric that evaluates a company's current share price relative to its per-share earnings, indicating market expectations and stock valuation.

Dividends Per Share

The amount of dividend that a company pays out for each outstanding share of its common stock.

Dividend Yield

A financial metric indicating the annual dividends a company distributes compared to its stock price.

Earnings Per Share

A financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.