Which of the Following Would a Bank Not Hold as Insurance

question 57

Multiple Choice

Which of the following would a bank not hold as insurance against the highest cost of deposit outflow-bank failure?

• A) Excess reserves
• B) Secondary reserves
• C) Bank capital
• D) Mortgages

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Definitions:

Statement of Changes

A financial statement that shows how the equity of a company has changed over a certain period due to various reasons like profits, losses, or distributions.

Deferred Tax Liability

A tax obligation due in the future for income that has been recognized in the financial statements before it is taxable by tax authorities.

Tax Depreciation

The depreciation expense deducted for tax purposes, allowing taxpayers to recover the cost of a property or asset used in a trade or business for income-producing purposes.

Accounting Depreciation

Represents the systematic allocation of the depreciable amount of an asset over its useful life, reflecting the wear and tear, obsolescence, or other declines in value as an expense in the income statement.