Question

1. Asset transformation and bank management True or False: All large banks and some small banks chosen by the Federal Reserve perform asset transformation. True False Regardless of what size and form banks may be, they all operate under the same accounting rules and regulations. As such, we can use financial statements, especially balance sheets, as a guide when examining how banks are managed. Use the following categorization table to identify a bank's assets and liabilities. Assets Liabilities Demand deposits Savings accounts Bank capital Cash/Reserves Bonds Bonds 0 0 Business and consumer loans Loans from other banks Which of the following currently makes up the largest share of bank assets? Business and consumer loans Government bonds Cash/Reserves Savings accounts

Answer 1

All large banks and some small banks chosen by the federal reserve perform the assets transformation.

The above statement is False.

Identifications of Bank assets and liabilities are as follows.

Demand Deposits - Liabilities

Saving accounts - Liabilities

Bank Capital - Liabilities

Cash/ reserve - Assets

Bonds - Assets

Business and consumer loans - Assets

Loans from other banks - Liabilities

Which of the following currently makes up the largest share of bank assets?

Answer :- Business and consumer loans