False

False

False

False
True
True
True

True

True

True

False

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1.
Core deposits (core deposits) are customers' deposit accounts at banks, usually savings accounts, current
accounts or short-term deposit accounts. They are a stable and less volatile source of funds than other major
sources of finance such as securities or short-term loans.

Stability: Core deposits provide banks with a stable source of funds for lending and investment. This helps to
minimize liquidity risk.
Low cost: Compared to raising capital from the market (such as bonds or loans), core deposits usually have
lower costs, because customers do not demand high interest rates.
Profitability: Core deposits can be used to generate income from lending, thereby increasing profits for the
bank.

2.
When evaluating a real estate loan application, lenders typically consider the following key factors:

Financial capacity: Lenders look at a borrower’s income, assets, and current debts to assess their ability
to repay the loan. Steady sources of income and a good credit history are important factors in increasing
the chances of approval.
Credit history: A borrower’s credit score is a major deciding factor. A high credit score and a history of
timely repayments are positive signals that indicate the borrower’s trustworthiness.
Collateral value: For real estate loans, the collateral (such as a home) needs to be valuable and liquid, as
it protects the lender in the event the borrower defaults.
Loan-to-Value (LTV) ratio: Lenders will determine the ratio between the loan amount and the property
value (Loan-to-Value, LTV). A low LTV ratio typically reduces risk and can help borrowers get better
interest rates.
Interest rates and loan terms: Both parties need to agree on interest rates and repayment terms. Borrowers
should be careful to choose a loan with interest rates and terms that fit their financial capabilities.
Risk of property value fluctuations: Lenders need to consider the risk of property market fluctuations,
especially in areas with unusual price increases or possible future price decreases.

If you are considering a loan for real estate purposes, you should pay attention to the following key
factors:
Personal financial situation:
Evaluate your monthly income, living expenses, and ability to save.
Credit score:
Check your credit score and improve it if necessary, as a high credit score can help you get a better
interest rate.
Current debt:
Calculate your current total debt and debt-to-income ratio to understand your ability to repay.
Loan-related costs:
Find out about the fees associated with borrowing such as processing fees, insurance fees, and property
valuation fees.
Research the real estate market:
Research property values in the area where you plan to invest to make an informed decision.
Loan terms: Understand the loan terms, interest rates, loan terms, and other terms before signing the
contract.
 Part 3 :

Ex 1 :
Earned
APY = 100 [21 +
Interest
(365/Days Period-1]
in
Account Balance
Average
Average Account Balance =
4, 000 x 150 +
3 , 200 x 50 + 550x165 2 330 82
= , .

365
Apy 100 [(1 40 365/365
17
=
+ -

=
1 72
.

2 , 330 . 82
Ex 2 :

Profit Asset Equity ROA ROE

I 20 % 1 % 25 0 2% 5%
.

2 20 % 1 % 30 0 2 .

% 6%

3 17 .
5 % 1 .
14 % 31 80 2 % 6 4
.
. .
%
4 17 8 % . 1 5 .
% 15 0 27 %
. 4%

5 18 % 1 % 29 .
40 .
10 % 4 4%.

Net income
Profit margin =

Total
Operating Revenues
Total
Asset Utilization =
Operating Revenues
Total
Average Assets
Total
Equity Multiplier = Average Assets
Total
Average Equity
ROA =
Net income

Total
Average Assets
ROE = Net income

Total
Average Equity
Analysis of Trends:
ROA remains relatively low throughout, indicating that the bank's profitability
relative to its assets is not high.
ROE shows a decline in years 4 and 5, which could suggest diminishing returns on
equity, potentially due to higher equity levels without proportional growth in net
income.
Profit Margin fluctuates slightly but shows a downward trend in years 3 and 4,
possibly indicating pressure on income relative to revenues.
Asset Utilization improves significantly in year 4 but falls back to 1.00% in year 5,
suggesting inconsistency in how effectively the bank generates revenue from its
assets.
Equity Multiplier drops in year 4, indicating a decrease in leverage, but then rises
again in year 5.
Recommendations:
To address these trends, management could:
Investigate the reasons for declining ROE and Asset Utilization and consider
strategies to enhance asset efficiency.
Examine cost structures to improve Profit Margin, potentially by focusing on more
profitable lines of business.
Consider a review of asset and equity allocation to optimize returns.