Exam (elaborations)
Chapter 9 Eco4223 Questions And Answers With Verified Solutions Already Passed!!!
- Course
- Institution
Chapter 9 Eco4223 Questions And Answers With Verified Solutions Already Passed!!!
[Show more]
Content preview
Chapter 9 Eco4223 Questions And Answers With Verified Solutions Already Passed!!! The Bank Balance Sheet consists of 2 things which include - ANSWER✔✔ Liabilities and Assets Liabilities consists of - ANSWER✔✔ *Checkable deposits *Non transaction deposits *Borrowings *Bank capital Assets consists of - ANSWER✔✔ *Reserves *Cash items in process of collection *Deposits at other banks *Securities *Loans *Other assets Opening of a checking account leads to an increase in the bank's reserves equal to the increase in checkable deposits. True of False - ANSWER✔✔ True Check Deposit: When a bank receives additional deposits, it gains an equal amount of reserves; when it loses deposits, it loses an equal amount of reserves. True or False - ANSWER✔✔ True Asset transformation: selling liabili ties with one set of characteristics and using the proceeds to buy assets with a different set of characteristics is called ___________ - ANSWER✔✔ Making a profit The bank borrows short and lends long to __________ - ANSWER✔✔ Make a profit General Princi ples of Bank Management - ANSWER✔✔ *Liquidity Management *Asset Management *Liability Management *Capital Adequacy Management *Credit Risk *Interest -rate Risk Liquidity Management and the Role of Reserves Excess reserves: *Suppose a bank's required reserv es are 10%. If a bank has ample excess reserves, a deposit outflow does not necessitate changes in other parts of its balance sheet. True or False - ANSWER✔✔ True Liquidity Management and the Role of Reserves Shortfall: *Reserves are a legal requirement a nd the shortfall must be eliminated *Excess reserves are insurance against the costs associated with deposit outflows - Are both of these statements true? - ANSWER✔✔ yes they are trueThe benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller classhub. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75759 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now