41. What is a bank’s return on assets (ROA)?
a) A measure of a bank’s profitability, calculated as the net income divided by the average total assets
b) The total amount of income earned by a bank
c) The percentage of a bank’s loans that are repaid on time
d) The difference between a bank’s equity and liabilities
42. What is the purpose of a bank’s capital conservation buffer?
a) To ensure that a bank has enough capital to absorb losses during periods of financial stress
b) To regulate interest rates in the economy
c) To restrict a bank’s lending activities
d) To calculate the interest rate for loans
43. What is the difference between a bank’s gross interest margin and its net interest margin?
a) The gross interest margin is the difference between a bank’s interest income and interest expenses, while the net interest margin is the gross interest margin minus non-interest expenses
b) The gross interest margin is the total amount of interest earned by a bank, while the net interest margin is the percentage of a bank’s loans that are repaid on time
c) The gross interest margin is the difference between a bank’s equity and liabilities, while the net interest margin is the difference between a bank’s interest income and interest expenses
d) There is no difference between a bank’s gross interest margin and its net interest margin
44. What is the role of a bank’s chief risk officer?
a) To identify and manage risks faced by the bank
b) To oversee the bank’s investment portfolio
c) To approve loan applications
d) To supervise the bank’s compliance with applicable laws and regulations
45. What is the purpose of a bank’s stress capital buffer?
a) To ensure that a bank has enough capital to absorb losses during periods of financial stress
b) To manage the bank’s investment portfolio
c) To regulate interest rates in the economy
d) To restrict a bank’s lending activities
