For Which of the Following Are Member Banks Allowed Borrowing

question 73

Multiple Choice

For which of the following are member banks allowed borrowing at the Fed's discount window?

• A) funds to purchase securities
• B) funds to meet depositor withdrawal demands
• C) to invest in subsidiaries
• D) to loan to other banks

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Definitions:

Salvage Value

An asset's expected selling price once it has concluded its period of usefulness.

Sunk Costs

Past expenditures that have already been incurred and cannot be recovered.

Incremental Cash Flows

The extra cash flow from operations generated by a company when it embarks on a new project.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting to assess the profitability of an investment.