If the Bank Decides to Cut Down on Interest Expenses

question 93

Multiple Choice

If the bank decides to cut down on interest expenses by reducing its dependence upon borrowed funds, what policy must the bank follow?

• A)Manage liquidity risk exclusively through reserve asset management.
• B)Manage liquidity risk exclusively through liability management.
• C)Reduce the bank's dependence upon demand deposits.
• D)Increase interest income by increasing lending.
• E)Increase interest income by increasing securities holdings.

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Definitions:

Bodily-kinesthetic

Pertains to the intelligence that involves the use of the body to express oneself, solve problems, and manipulate objects, emphasizing physical coordination and skill.

Linguistic

Pertains to the study and structure of language, including its development, use, and relation to communication processes.

Spatial

Relating to, occupying, or having the character of space, often used in the context of understanding the physical location and dimensions of objects.

Musical

A theatrical performance combining music, songs, spoken dialogue, and dance to convey a story or express emotions.