When a Bank Repays a _________________ Loan,the Fed _____________________ the Bank's

question 20

Multiple Choice

When a bank repays a _________________ loan,the Fed _____________________ the bank's reserve account.

• A) overnight; subtracts the repayment from
• B) overnight; adds the repayment to
• C) discount; adds the repayment to
• D) discount; subtracts the repayment from

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Definitions:

Acid-Test Ratio

A financial metric that measures a company's ability to meet its short-term obligations with its most liquid assets.

Current Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its short-term assets.

Acid-Test Ratio

A financial metric comparing a company's most liquid assets (excluding inventory) to its current liabilities, used to assess short-term solvency.

Marketable Securities

These are liquid financial instruments that can easily be converted into cash at their current value in the financial markets.