A bank failure is less likely to occur when A) a bank holds less U.S. government securities.

1) A bank failure is less likely to occur when

A) a bank holds less U.S. government securities.

B) a bank suffers large deposit outflows.

C) a bank holds fewer excess reserves.

D) a bank has more bank capital.

2) The leverage ratio is the ratio of a bank\"s

A) assets divided by its liabilities.

B) income divided by its assets.

C) capital divided by its total assets.

D) capital divided by its total liabilities.

3) To be considered well capitalized, a bank\"s leverage ratio must exceed ________.

A) 10%

B) 8%

C) 5%

D) 3%

4) Off-balance-sheet activities

A) generate fee income with no increase in risk.

B) increase bank risk but do not increase income.

C) generate fee income but increase a bank\"s risk.

D) generate fee income and reduce risk.