age 1 of 22
FINA 5320 2 EXAM STUDY GUIDE 2025/2026
COMPLETE QUESTIONS WITH CORRECT DETAILED
ANSWERS || 100% GUARANTEED PASS <BRAND
NEW VERSION>
A bank has interest income to total assets ratio of 5.45 percent
and has noninterest income of $45 million
and total assets of $700 million. What is the bank's asset
utilization ratio? .....Answer........0545 + (45 million / 700 million)
= 11.88%
Blue Ridge Bank has a PM of 12 percent, an interest income to
total assets ratio of 6.00 percent, and a
noninterest income to assets ratio of 1.50 percent. Blue Ridge
also has $9 in assets per dollar in equity
,age 2 of 22
capital. Blue Ridge's ROE is .....Answer.......0.12 x (0.06 +
0.0150) x 9 = 8.10%
A municipal bond is paying a 6 percent annual yield. An
equivalent risk corporate bond is paying 7 percent.
Investors with a tax rate of _______________ or higher would
prefer the municipal bond. .....Answer.......1 - (0.06/0.0700) =
14.28%
A policyholder wishes to annuitize the cash value of her
insurance policy at retirement. She desires an
annual payment of $95,000 per year and the cash value is
expected to be $1,100,000 at retirement.
Approximately how many payments can she expect to receive if
annuity interest rates are 5.122 percent?
, age 3 of 22
.....Answer.......$1,100,000/$95,000 = PVIFA (5.122%, N yrs.);
N = 18; log rule or financial calculator required
An insurance line has a loss ratio of 62 percent and an expense
ratio of 35 percent; the firm pays 2 percent
of premiums to policyholders as dividends and has an investment
yield to premium ratio of 9 percent. The
operating ratio for this line is .....Answer.......Operating ratio =
62 + 35 + 2 - 9= 90
You have $10,000 to invest and you are considering investing in
a fund. The fund charges a front-end load
of 5.75 percent and an annual expense fee of 1.25 percent of
the average asset value over the year. You
FINA 5320 2 EXAM STUDY GUIDE 2025/2026
COMPLETE QUESTIONS WITH CORRECT DETAILED
ANSWERS || 100% GUARANTEED PASS <BRAND
NEW VERSION>
A bank has interest income to total assets ratio of 5.45 percent
and has noninterest income of $45 million
and total assets of $700 million. What is the bank's asset
utilization ratio? .....Answer........0545 + (45 million / 700 million)
= 11.88%
Blue Ridge Bank has a PM of 12 percent, an interest income to
total assets ratio of 6.00 percent, and a
noninterest income to assets ratio of 1.50 percent. Blue Ridge
also has $9 in assets per dollar in equity
,age 2 of 22
capital. Blue Ridge's ROE is .....Answer.......0.12 x (0.06 +
0.0150) x 9 = 8.10%
A municipal bond is paying a 6 percent annual yield. An
equivalent risk corporate bond is paying 7 percent.
Investors with a tax rate of _______________ or higher would
prefer the municipal bond. .....Answer.......1 - (0.06/0.0700) =
14.28%
A policyholder wishes to annuitize the cash value of her
insurance policy at retirement. She desires an
annual payment of $95,000 per year and the cash value is
expected to be $1,100,000 at retirement.
Approximately how many payments can she expect to receive if
annuity interest rates are 5.122 percent?
, age 3 of 22
.....Answer.......$1,100,000/$95,000 = PVIFA (5.122%, N yrs.);
N = 18; log rule or financial calculator required
An insurance line has a loss ratio of 62 percent and an expense
ratio of 35 percent; the firm pays 2 percent
of premiums to policyholders as dividends and has an investment
yield to premium ratio of 9 percent. The
operating ratio for this line is .....Answer.......Operating ratio =
62 + 35 + 2 - 9= 90
You have $10,000 to invest and you are considering investing in
a fund. The fund charges a front-end load
of 5.75 percent and an annual expense fee of 1.25 percent of
the average asset value over the year. You
