The Amount of Capital That Banks Are Required to Hold

question 69

Multiple Choice

The amount of capital that banks are required to hold depends on the:

• A)amount of deposits held at a bank.
• B)riskiness of the bank's assets.
• C)reserve requirements for deposits set by the Bank of Canada.
• D)level of deposit insurance coverage.

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Definitions:

Reported Yield

The interest or dividends received from an investment, expressed as a percentage of the investment's current market value.

Required Return

The minimum rate of return an investor expects to achieve from an investment, considering its risk.

Expected Dividend

The forecasted payment of profits by a corporation to its shareholders, usually announced by the company's board of directors.