Of the Following,which Would Be the First Choice for a Bank

question 78

Multiple Choice

Of the following,which would be the first choice for a bank facing a reserve deficiency?

• A) Call in loans
• B) Borrow from the Fed
• C) Sell securities
• D) Borrow from other banks

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Definitions:

Probability

The measure of the likelihood that an event will occur.

Expected Utility

A concept in economics and finance that calculates the anticipated utility of different choices, taking into account the various possible outcomes and their probabilities.

Expected Utility Function

A mathematical representation of a decision-maker's preference over uncertain outcomes, emphasizing the expected level of satisfaction or value.

Probability

A numerical assessment between 0 and 1 indicating how probable it is for an event to take place.