The Most Important Category of Assets on a Bank's Balance

question 114

Multiple Choice

The most important category of assets on a bank's balance sheet is

• A) discount loans.
• B) securities.
• C) loans.
• D) cash items in the process of collection.

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Definitions:

Economic Profits

Profits or losses calculated by considering both explicit costs, such as direct expenses, and implicit costs, like opportunity costs.

Arbitrage Opportunity

The opportunity to buy an asset at a low price in one market and sell it for a higher price in another, exploiting price discrepancies.

Investment Portfolio

Set of securities chosen by an investor.

Sure Profit

A guaranteed financial gain with no risk of loss, often considered unrealistic in most trading or investment scenarios.