Q1:

Some central banks do not pay interest on reserves. the banks have additional
funds, which they can either lend it out to the central banks in the form of
excess reserves which the central banks later lends out to different banks as
and when they they require additional funds or they can either lend this
money to other banks at the fed interest rate since the businesses will be
losing the amount of interest earned on these deposits,some bankers see the
lost money as if they are paying tax on their business. When the market rates
are below the Federal funds rate, banks find it suitable to park the excess
reserves with the central bank and earn interest , which is seen as more
beneficial for them .
Q4: Over night rates is used for forecasting for short-term interest rates in the
wider economy prospect and can have a significant impact on various
economic indicators such as employment and inflation. If over night quality is
high, it is more expensive for consumers to borrow money. Banks that are in
short supply at the end of the business day can borrow overnight from the
remaining banks to keep their savings. Borrowing overnight helps credit
institutions overcome their liquid shortages. So these will helps banks for
adjusting the supply of money in banks.
Q5:
Interest rate are directly associated to the investment and plays a vital role In a
firm's investment decision.
We know that interest is the reward of lending for lendors and is cost of
borrowing for borrowers.
When the interest rate is higher, it affects investment decision as follows-
1. Available fund will have more opportunity costs, because fund can be used
at more beneficial places due to higher interest rate instead of new projects. 
2. Households and other customers will try to save much more in comparison
to expenditure, so demand of product may not be, as expected, hence such
investment will not be create sufficient demand that leads to generate less
revenue.
3. In case of higher interest rate, borrowing is costlier as the firm has to pay
more interest as cost of debt. Due to lower demand of products, cost of debts
becomes more than the return on investment, which is a harmful for a
business.
In case of lower interest rate, all conditions mentioned above will be opposite
and firm will be motivated for investment.
Finally we can conclude that higher interest rate distracts investment
decisions and lower interest rate attracts the investment decision for a firm. So
in the condition of higher interest rate a firm should keep him away in
investment in new projects and vice versa. 
Q6:
Banks need to hold capital to protect themselves from losses. If a bank has a
lot of loans that go bad, it can lose a lot of money. To protect themselves,
banks set aside money to cover potential losses. This money is called capital.

There are costs associated with holding capital. The more capital a bank has,
the less money it can lend out. This means that banks with a lot of capital
can't make as much money as banks with less capital. Also, banks have to pay
taxes on their capital. So, holding capital costs banks money.
Q9:
Interest expenses have large fluctuations because interest rates fluctuate so
much; provisions for loan losses fluctuate a lot because when the economy
turns down or a particular sector of the economy deteriorates, the potential for
loan losses rises dramatically.
Q10:
Measurement of the percentage of assets which are financed by the
shareholders using the financial leverage ratio. So equity multiplier is a
financial leverage ratio which computes the portion of assets which are owed
by the shareholders.

To better off in this regard, the shareholders must have a good equity portion
in the capital. Net worth of the bank is considered as bank capital. Cash held
in hand , other reserves with federal reserve , loans given to customers etc. are
the assets of banks. So when there is good contribution of capital by the
shareholders,then there will a good equity multiplier.
Q11:
Net interest margin is one indicator of a bank's profitability and growth. It
reveals how much the bank is earning in interest on its loans compared to how
much it is paying out in interest on deposits.
Q15

Return on assets will be reflecting the total return which will be generated by
the banking company for the total shareholders which will be including the
debt holders along with the equity shareholders of the company, so it will
reflect the ability of the bank to generate return on total assets. 

Return on equity will be reflecting the total return which will be generated by
the banking company for the equity shareholders of the company and it will
be reflecting the ability of the banking company to maximize the rate of
return for the owners of the company.

Return on asset and return on equity are not similar in nature because return
on assset will reflect the ability of the company for generating higher return
for all the stakeholders including the debt holders but the return on equity is
majorly concentrating upon the shareholders, so it will be eliminating the
impact of the debt and it will also take the advantage of the debt capital in the
total rate of return.
They are not moving in the same direction because they will be reflecting that
return on equity will only be generated after all the payment has been made to
the debt holders of the company but return on asset will not remove the
payment of debt holders.

Increase in capital will be reducing the return on equity because there will be
higher number of equity shareholders and higher outstanding share will be
decreasing the Earning per share of the company.

Q13 KHÔNG CHẮC

Q10

Measurement of the percentage of assets which are financed by the

shareholders using the financial leverage ratio. So equity multiplier is a
financial leverage ratio which computes the portion of assets which are owed
by the shareholders. 

To better off in this regard, the shareholders must have a good equity portion
in the capital. Net worth of the bank is considered as bank capital. Cash held
in hand , other reserves with federal reserve , loans given to customers etc. are
the assets of banks. So when there is good contribution of capital by the
shareholders,then there will a good equity multiplier. 
Q9
Interest expenses have large fluctuations because interest rates fluctuate so
much; provisions for loan losses fluctuate a lot because when the economy
turns down or a particular sector of the economy deteriorates, the potential for
loan losses rises dramatically.