A System in Which Banks Hold Reserves Whose Value Is

question 214

Multiple Choice

A system in which banks hold reserves whose value is less than the sum of claims on those reserves is called

• A) speculative banking.
• B) leveraged banking.
• C) fractional reserve banking.
• D) international banking.

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Definitions:

Rate of Growth

The percentage growth in the magnitude or worth of an item during a particular timeframe.

Required Rate of Return

The lowest annual yield necessary to draw individuals or firms towards investing in a specific venture or financial proposition.

Cumulative Voting

A voting system that allows shareholders to allocate all their votes to one candidate or distribute them among several candidates when electing directors.

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate policy and the election of the board of directors.