Why Are Passbook Savings Generally Less Liquid Than Demand Deposits

question 119

Multiple Choice

Why are passbook savings generally less liquid than demand deposits and NOW accounts?

• A)They are noncheckable.
• B)They usually involve physical presence at the institution for withdrawal.
• C)The DI has the legal power to delay payment for as long as one month.
• D)They tend to pay higher interest rates than demand deposits and NOW accounts.
• E)All of the options.

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Definitions:

False Positive

An error in data testing in which a test result improperly indicates the presence of a condition (such as a disease when it is not present).

Expected Gain

The anticipated value or profit that results from a particular action or decision, often calculated in statistical or financial models.

False Negative

An error in test results in which a positive condition is incorrectly reported as negative.

Discrete Probability Distribution

A statistical distribution that shows the probabilities of outcomes with distinct values.