A bank that does not want to hold a lot of excess reserves but wants to manage liquidity risk is likely to:
A. make sure that most of its assets are in small business loans.
B. hold a lot in highly liquid securities.
C. have a high ratio of loans to securities.
D. limit withdrawals by customers.
Answer: B
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To be effective, a price floor must be
a. above the equilibrium price. b. at the equilibrium price. c. below the equilibrium price. d. anywhere on the graph.
Fixed costs are those costs that remain fixed no matter how long the time horizon is
a. True b. False Indicate whether the statement is true or false
If the price level last year was 180 and this year it is 176, then
a. there was inflation of 2.3 percent. b. there was inflation of 4.0 percent. c. there was deflation of 2.2 percent. d. there was deflation of 4.0 percent.
Cost curves shift if i. technology changes. ii. the prices of factors of production change. iii. productivity changes
A) only i B) i and iii C) only ii D) i and ii E) i, ii, and iii