Beware of those low fixed interest loan deals we hear on the radion all the time. From the Denver Post:

"It is all part of stopping the worst practices and making consumers more financially literate," Zavislan said. "We want to drive home the point that a 1 or 2 percent interest rate is just a teaser rate designed to get you in the door, and that there's really no such thing as a 30-year fixed-interest mortgage at that rate."

Why are a bank's liabilities said to be its sources of funds? Why are a bank's assets said to be its uses of funds?

Why would government regulators and taxpayers like banks to have high net worth?

Describe the types of risk that banks face.

How do banks try to reduce credit risk?

What are floating rate loans? How do they help to reduce the interest rate risk for banks?

What are the major types of off-balance sheet activities in which banks engage? Why have banks been involved in more of these activities recently and less in traditional banking?

Suppose that banks collectively have not managed their exposure to interest rate risk well and that market interest rates increase and become more volatile. What do you predict will happen to the value of the equity capital in the banking industry? To the number of bank failures?

Suppose that Ann, who has an account at First Bank, writes a check for $1000 to Bill, who has an account at Melon Bank. When the check clears, how have the balance sheets of First and Melon been affected?

If you were a banker who believed that interest rates were going to rise, what would you try to do with your bank's portfolio?

What are credit scores and how are they computed?