This is the process of planning, controlling, and monitoring a credit union's assets, liabilities, and capital to achieve financial goals and control financial risk.
What is Asset Liability Management
100
These options give members a choice; for example, to pay off a loan early or make an early withdrawal on a share certificate.
What is embeded option
100
The post powerful interest rate risk management tool is
What is Pricing
100
This rate can be used as I yield on assets
What is 30 year treasury bond
100
Strategy for purchasing CD's (funding)
What is at minimum repurchase funding that is about to mature.
200
The three Key components of Asset-Liability Management program
What are
1) ALM concepts
2) ALM information systems
3) ALM decision making process
200
Providing a 30 year fixed rate mortgage is an example of
What is lending long term
200
Typically when interest rates change ______ ______ rates move faster than ______ _______ rates
What is short term/long term
200
This is the difference between the rate paid to acquire funds (member savings or borrowed money) and the interest rate earned on loans and investments
What is spread
200
The funding strategy for replacing maturing securities
What is replace at least the maturing securities
300
This type of risk it the probability that a borrower will fail to make agreed upon payments.
What is Credit Risk?
300
Offering short term deposits is an example of
What is funding short term
300
On the average cu's balance sheet, _______ have a shorter average maturity than assets
What is liabilities
300
This is a way to enhance earnings and manage risk. It incorporates net interest margin along with relative rate of growth and mix of assets, liabilities and capital.
What is ALM
300
MMS vs 3m CD's vs FF Purchased is considered this
What is The Trinity of Funding
400
This type of risk is the probability that a credit union will lack sufficient cash to meet loan demand, deposit outflow or expenses.
What is Liquidity risk?
400
When measuring interest rate risk one approach is to measure the long term economic impact of interest rate changes on capital. The capital impact is measure thru
What is present value analysis of balance sheet and cash flows.
400
Costs of funds move faster than
What is its yield on assets for any given market interest change
400
Economic growth can be influenced by changing the supply of money and changing interest rates. This is referred to as
What is monetary policy. This is conducted by the Federal Reserves Federal Open Market Committee
400
In the bank game we learned to
What is Question the merit of different assets
500
This risk is the probability that income and market value will change when the interest rates change. This risk is managed by limiting the extent to which the yield on assets varies significantly from the cost of liabilities.
What is Interest Rate Risk
500
Most credit unions are negatively affected by __________ rates, and positively effected by _____________ rates
What is rising/falling
500
These two short term rates are a good measure of a credit union's cost of funds?
What is federal funds rates and 6 mo Treasury Bills rates
500
Economic growth can also be influenced by changing taxation and government spending. This is referred to as